Annual Percentage Rate (APR)
This is a way of expressing the changes that will be added to a loan, which include not just interest but also setting- up charges, agent's or survey fees and other associated costs. These are all added to the interest payable and then distributed across the period of the loan to give customers a standardised cost for a loan which they can compare with that charged by other lenders.
Costs which can bee added only when a person defaults upon a loan do not have to be shown in the APR.
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