1. SkipCarDealer
  2. Glossary
  3. Interest Vs Apr: what does it mean in Canadian car loans?
Interest Vs Apr: what does it mean in Canadian car loans?
Open Your Account
Car Loan Glossary • basics

Interest Vs Apr: what does it mean in Canadian car loans?

In Canadian car loans, the Interest Rate represents the core percentage charged on the principal amount borrowed, reflecting the cost of using the lender's money, typically calculated annually on the outstanding balance. The Annual Percentage Rate (APR), conversely, is a more comprehensive measure that includes this nominal interest rate plus any mandatory fees or charges directly associated with obtaining the loan, such as administration fees, loan origination costs, or certain required insurance premiums, expressed as a single annual percentage. Under provincial consumer protection legislation across Canada, like Ontario's Consumer Protection Act or Alberta's Fair Trading Act, lenders are legally mandated to disclose the APR clearly and prominently, ensuring transparency and enabling borrowers to compare the true cost of credit from different financial institutions. This distinction is paramount for Canadian consumers because while the interest rate dictates the immediate borrowing cost, the APR provides the full, all-inclusive picture of the total cost of borrowing over the loan's term, allowing for an accurate, apples-to-apples comparison between various loan offers. Especially in a dynamic market like 202
Related Topics: basics glossary

Related Financial Terms

What is an auto loan APR in Canada?

The Annual Percentage Rate (APR) on an auto loan in Canada represents the true, comprehens...
Explain an auto loan APR in Canada?

The Annual Percentage Rate (APR) on an auto loan in Canada represents the true, total annu...
What is an auto loan APR in Canada in Canada?

In Canada, the Annual Percentage Rate (APR) on an auto loan represents the true, all-inclu...
Is it possible to I repay a car loan early?

Yes, it is generally possible and often financially beneficial to repay a car loan early i...

Need more help?

Explore our full glossary or get in touch with our financing experts.

View Full Glossary
Search Glossary
Type a keyword and hit enter
Browse by Letter
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Popular Terms

Ready to get approved?

Skip the dealership hassle and get pre-approved for your car loan today.

Apply Now

With over 50 years of experience in the automotive industry, we know what we're doing when it comes to getting the best deals. We specialize in credit building and rebuilding, and with our expertise, we're sure to find a solution that suits you! Its our Skip Car Dealer Guarantee.

Credit Solutions

Loan Types

Programs

Partners

155-2 King Street West, Unit #107, Hamilton, ON, L8P 4S0 888-270-SKIP (7547)

PARTICIPATING LENDERS MAY VERIFY YOUR SOCIAL INSURANCE NUMBER, DRIVER'S LICENSE NUMBER, PROVINCIAL ID, OR ANY OTHER GOV IDENTIFICATIONS AND REVIEW YOUR INFORMATION AGAINST FEDERAL DATABASES TO INCLUDE BUT NOT LIMITED TO EQUIFAX, TRANSUNION, AND EXPERIAN TO DETERMINE CREDIT WORTHINESS, CREDIT STANDING AND/OR CREDIT CAPACITY. BY SUBMITTING YOUR APPLICATION AND INFORMATION ON THIS WEBSITE, YOU AGREE TO ALLOW ANY AND ALL PARTICIPATING LENDERS TO VERIFY YOUR INFORMATION AND CHECK YOUR CREDIT. SKIP CAR DEALER FOLLOWS BEST PRACTICES OF THE CANADIAN FAIR TRADING ACT OF 1999. ALL FINANCE IS SUBJECT TO EMPLOYMENT STATUS AND INCOME. APPLICANTS MUST BE 18 OR OVER, TERMS AND CONDITIONS APPLY, GUARANTEES AND INDEMNITIES MAY BE REQUIRED. WE CAN INTRODUCE YOU TO A NUMBER OF FINANCE PROVIDERS BASED ON YOUR CREDIT RATING. WRITTEN QUOTATION ON REQUEST.

This site uses cookies so that we can provide you with the best user experience. By continuing to use the site you are consenting for cookies to be used. Further information on cookies and how you can disable them is available on our cookie policy.

Copyright © 2020 Skip Car Dealer All Rights Reserved.

Terms of use | Privacy Policy

Top