Glossary

What is APR?

What is APR? APR (annual percentage rate) expresses the yearly cost of borrowing money — including interest and certain mandatory fees — as a single percentage. It exists so that two loan offers can be compared on the same scale.

APR vs. interest rate

The interest rate is the cost of borrowing the principal alone. APR adds certain fees required to get the loan (such as origination fees), so APR is usually higher than the interest rate. A loan advertised at a low interest rate can still carry a much higher APR once fees are included.

APY vs. APR

APR measures the cost of borrowing. APY (annual percentage yield) measures earnings on savings, with compounding included. They are not interchangeable. Borrowing uses APR; savings uses APY.

What APR does not include

APR typically does not include optional fees, late fees, penalties, or contingent costs. For credit cards, the APR can also vary by transaction type (purchases, balance transfers, cash advances). Read the full Truth in Lending disclosure, not just the advertised APR.

How APR relates to Kronos

KronosPay LLC is a financial technology company, not a lender, and Kronos is not a credit product. APR applies to borrowing, which Kronos does not provide. Any provider-dependent lending feature that ever appeared in the app would name the lender and disclose its own APR under applicable law. Read the bank-status page.

Primary sources

General educational information only; not financial or legal advice.