APR (Annual Percentage Rate)

APR (Annual Percentage Rate) expresses the total yearly cost of a loan as a single percentage: the interest rate plus origination and other mandatory charges, annualized over the loan term. It is almost always higher than the headline "interest rate."

Why APR, not the interest rate

Lenders often advertise the interest rate because it is the lower, more attractive number. But two loans with the same interest rate can cost very different amounts once you add a 1% to 2% origination fee. APR rolls those fees in, so a loan with a low rate but a high fee doesn't look artificially cheap. That is why every rate on this site is stored and compared as an effective APR inclusive of the origination fee, never the raw interest rate.

A worked example

A one-year loan at an 8% interest rate with a 1.5% origination fee carries an APR of roughly 9.5%, because the fee is paid upfront but spread across the loan's life. The shorter the term, the more a fixed origination fee inflates the APR.

What APR does and doesn't capture

APR captures interest and mandatory upfront fees. It does not capture liquidation fees (charged only if your collateral is sold), prepayment penalties, or the opportunity cost of your pledged Bitcoin. Always read the full fee schedule alongside the APR.

Deferred-interest products

Some lenders offer "payment-at-maturity" or deferred-interest structures where you make no monthly payments and interest accrues to the end of the term. The APR still reflects the annualized cost, but the total dollar interest can be higher than a monthly-pay loan because interest builds on a larger outstanding balance.