What APR is
The annual percentage rate expresses the cost of credit as a yearly percentage that includes the interest rate plus most mandatory fees. It exists so borrowers can compare offers that package interest and charges differently.
The interest rate alone describes only the charge on the principal. A loan with a lower interest rate but a large origination fee can be more expensive overall than one with a higher rate and no fee.
Where APR can mislead
APR assumes the loan runs its full scheduled term. If you repay early, the effective cost of a fee-heavy loan rises, because the fee is spread over fewer months than assumed.
APR also annualises very short-term credit, which produces figures that look extreme relative to the dollar cost. Both figures are useful: the APR for comparison, the dollar cost for budgeting.
Comparing APRs across different terms is not meaningful. Hold the term and amount constant.
Fixed and variable pricing
A fixed rate keeps the payment stable for the term. A variable rate moves with an index, so the payment or the amortization can change. A quoted APR on a variable product describes today's cost, not a guarantee.
A practical comparison routine
Request the APR, the total amount repayable and the payment schedule for each offer at the same amount and term. Rank by total repayable, then check the agreement for prepayment terms and hardship provisions before deciding.