All advice
Understanding4 min read
APR or borrowing rate: reading an offer without getting it wrong
Two rates, two uses. Understanding the difference avoids nasty surprises when comparing.
By The editorial team · July 22, 2026
The borrowing rate
It is the nominal rate used to calculate interest. On its own, it does not tell you the real cost of the credit.
The APR
The Annual Percentage Rate includes the fees and any insurance. It is the one to compare from one offer to another; it is logically higher than the borrowing rate.
In practice
Always compare APRs with each other, on the same amount and the same term. A low borrowing rate paired with high fees can cost more than a less flattering-looking offer.
Unsure about your file?
Run the Reading: honest guidance, in a few minutes, with no commitment.
Run my Reading