I need to understand the difference between the interest rate and the APR. Can you please explain in layman's terms?
The interest rate is a pure interest rate expressed as a simple rate. The APR annualizes (Annual Percentage Rate) this so that you can compare apples to apples. The APR, when quoted with a loan, includes all the costs of the loan that you would pay in a borrowing scenario. That is, if you paid an application fee, or points on a mortgage, those are costs unique to a loan. They are added to the interest and expressed in the annual rate.
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The interest rate is a pure interest rate expressed as a simple rate. The APR annualizes (Annual Percentage Rate) this so that you can compare apples to apples. The APR, when quoted with a 