Glossary

Interest Rate

The cost of borrowing money, expressed as a percentage of the principal.

Interest rate is NOT the same as APR. Interest rate excludes loan fees; APR rolls them in. When comparing loans, always compare APRs.

Related terms

APR (Annual Percentage Rate)

The yearly cost of a loan including interest and fees, expressed as a percentage.

Auto Loan

A secured installment loan used to purchase a vehicle, with the car serving as collateral.

Put it into practice