Definition
Where interest on loans is expressed as other than a yearly rate, for example 1.5% per month, APR is the equivalent rate over a year, in this case 19.56%.
The Consumer Credit Act 1974 requires companies that advertise loans or credit cards to state what the APR rate is. This enables would be borrowers to compare rates and to see the true rate of interest repayment they would incur over the full year.