The difference between APR and Interest Rate

[@LuisGonzalez-dq4bg]

Good video, but we need side by side comparison of a (some?) sample scenario(s). This is a theoretical explanation, but I am still uneasy about the math/numbers behind the difference of both percentages. Thank you!

[@LizyHoeffer]

Just made this video. Let meknow what you think kzbin.info/www/bejne/kKvNfGCEfs6Mnsk

[@LuisGonzalez-dq4bg]

@@LizyHoeffer awesome 👏🏼 Thank you! ☺️

[@mariafitts]

I am confused as to why do you need 30 years to pay the fees of buying a house. Or can the APR be paid sooner.

[@LuisGonzalez-dq4bg]

@@mariafitts in an effort to avoid any cynicism from my part, I believe it has to do with the bank trying to get as much as legally possible from you. That is why, I believe, the supreme court ruled in favor of the “APR concept”.

[@rw8373]

Wow so clear and easy to understand got a new subscriber!

[@Angela-w6y]

No lie, this video made it easy to understand the difference between interest rate and APR. Thank you for 'dumbing it down' for real people. :)

[@Engineerboy100]

Good job, thank you for a nice short general explanation. I needed a quick refresher :)

[@LizyHoeffer]

Clint Hightower happy to be of service!

[@aj_english87]

Thank you Miss Hoeffer, this helped me a ton and was very well explained. Thank you for your time in making this video and putting out there.

[@LizyHoeffer]

Thank you so much for the kind words!

[@melissaeatsitall6399]

I must be a dud, I still don't understand haha.

[@Gregzilla83]

Nah, I heard it, I still don't get it. I fully understand want an interest rate is, no need to mention that.

[@melissaeatsitall6399]

@@Gregzilla83 hah, glad I’m not the only one. Oleg Tkach explains it well. I’d link it, but I think youtube will just remove my comment. if you search “difference between interest rate and APR” his video comes up next after this one. Very simple, straight forward and no BS.

[@rodrigorodriguez2299]

I didn’t understand anything I was distracted by her breast

[@johnmcnulty1930]

@@rodrigorodriguez2299 Dont know why you feel the need to comment this...

[@i890ola]

Me too😂

[@alwaysinsearch]

When choosing a loan should I focus on who has the lowest interest rate or lowest monthly costs?

[@MrBurgerPal]

This vid has the most views on your channel, for MASSIVE reasons. but seriously, more thumbnails like this one would blow the channel up for financial information

[@hamzaouladbenayad3053]

Very cool, I liked it very much and I loved you. Greetings from Morocco

[@philam297]

I just liked and subscribed!!

[@LizyHoeffer]

Thank you so much

[@tigerlilly6895]

Thank you, and nice to meet you and see you, but this would have been better to see this in black and white... sample scenarios...

[@SophalChao]

good point and very informative.

[@OmedyStories]

Hey Lizy , I just watched your video and I must say that it was really informative and well-made. I was wondering if I could help you edit highly engaging thumbnails ?

[@chowtimex3]

You just explained it like a bank would still not getting it just looking at you i already knew you were going to do that

[@Cello69.]

There’s so many “interest rates” it’s really confusing. Like… -Feds interest rates hikes -mortgages and credit card rates -rate of return like in CDs Are they related in anyway?

[@serg_lupescu]

Great video Lizy!

[@LizyHoeffer]

Thank you so much!! :)

[@jenniferweiss5488]

That was clear as mud.

[@edwizard62]

I'm more confused now. Thank you.

[@jasminpantojas2471]

Thanks for the information it was very helpful ...

[@LizyHoeffer]

Glad it was helpful!

[@kimberlygriffin6136]

I like your personality so I subscribed LoL 😂

[@LizyHoeffer]

Thank you so much :) I appreciate you!

[@WalkerOne]

Loved the content.

[@LizyHoeffer]

Thank you so much for your kind words! I am going LIVE tomorrow on my channel at 6PM! Would love it if you stopped by!

[@darkknight097]

Can someone just tell me if im paying interest or APR when I pay a mortgage payment? All this extra crap is so needlessly confusing

[@LizyHoeffer]

You paying interest on your outstanding balance every month. APR is to help you understand total Cost of interest and fees for borrowing over an extended time

[@jeraldschumann3305]

Something more that I want to know the cycle and the due date, and how my interest, APRs, fees and everything when using a credit card

[@LizyHoeffer]

Yeye Games credit cards are tricky and each card is different on how they calculate interest. There are some high interest that compound interest daily and some that have a 0 or teaser rate for a period of time... but essentially most cars will not accrue interest of the balance is paid on or before the due date.

[@rickyngaue3958]

So the interest rate would be included in the APR?

[@PhuongVo-tm6ob]

Great video...Thank you and I have subscribed.

[@LizyHoeffer]

Phuong Vo yay thank you!!!

[@cabininthewoods7326]

So if interest rate is 5% and apr is 5.785%. If i pay all closing fees in cash or cc, is my interest rate on mortgage 5%?

[@evangonzales4848]

so they are both together ?

[@LizyHoeffer]

Yes. Interest rate impacts your monthly payment. APR shows you total cost of your loan with fees and interest over the life of your loan

[@jeraldschumann3305]

I love your videos, I would like to know about the difference between interest and fee, also about how the APR work on our credit cards, moreover I would like to know about credit cards and the difference between paypass and the chip credit card.

[@chriswesly871]

Thank you for this video! maliandebt just helped me with mine

[@gloomiehoodie]

Yep, watch out for those letters in mail with those attractive refinance rates...they want your money with their APR, which is a percentage of our loan. They attract you with their 2.49% interest rate (which has lots of variables and hard to get) and on top that they hit you with their 3.5% APR with saying no points or closing costs, which is total bolone, the APR are these fees hidden behind this fancy acronym. In sum, if you get a APR of 3.85% on a loan of $400K, you will pay $15,000.00 typically added to your loan.

[@kingofslotsmillion3263]

So we shouldn't even worry about Apr since we can't control the figures in the apr. ?

[@dimaisatree]

I’m just trying to find out why my $1,100 loan turned into me having to pay off $5,800 because for some reason my APR is 580% and what can I do now to lower it?? Please answer, I’m desperate for help right now

[@LizyHoeffer]

You need to examine your fee estimate. Your loan probably has high interest and fees. Have you used this to shop against competing lenders?

[@pahpyaw]

Does apr and interest rate mean the same in mortgage and your bank account?

[@LizyHoeffer]

Typically APR refers to costs in borrowering. Have you asked your banker about fees associated with your bank account? there are so many free checking account options now days.

[@mariafitts]

Can the APR be lower if I pay more money in down payment ??

[@lucasrodriguez6434]

No, The apr is based on the cost associated to obtain the loan. For example, some banks charge origination, discount points, and processing fees.

[@mariafitts]

@@lucasrodriguez6434 i recently applied for a loan and was approved for that loan on an interest rate of 2.75 but I was checking my loam status right now and my APR says 3.094%, why is this soooo significantly way more than my interest rate. ?

[@lucasrodriguez6434]

@@mariafitts it is based on the broker or bank’s fees. The higher the fees the higher the APR. Sometimes if you can provide proof to the lender that there is a competitor that is offering a better deal you can negotiate the rate. You have to have a loan estimate or the advertisement in order for them to match it.

[@davidhodge8509]

Great explanation thank you! I’m starting a side hustle as a loan signing agent and was looking for a refresher on APR. This was perfect!

[@LizyHoeffer]

So happy this helped!!!

[@oussamaelbaroudi8991]

Thank you for your time.

[@nelsonmenezes194]

no one could explain it better !!! Great energy ! Thank you

[@HimanshuvMaheshwari]

APR is a one-time payment you need to pay after which you only pay the interest rate? is this correct?

[@damep4421]

Thank you this video was very helpful

[@hardroad1536]

So APR is a one time fee

[@mingusmanoz9854]

Sorry, but I need it explained slowly and with simple examples...all the Fees? Then, then the closing cost is embedded in the APR? Then closing should be only what's not mandatory...property tax, local legal requirements, right?

[@lolitaharb2374]

Hi Liz, Thank you so much for this video. It’s super helpful. I still have a question since the APR is including the charges and the fees for the closing cost. In this case it should be a one time thing because once it’s paid at the very beginning it’s done. I have the situation where I am planning to buy a home and they offered me the first year 3.99%, the next year 4.99%, and 3 to 30 is 5.99%, loan will have 6.49% APR. Would you please explain that to me? Lynn

[@xmen123ify]

Sounds like an arm loan 3-1 . I am only big fan of those if you are planning stay in the property for long time. Compare how fast you will recover your closing costs

[@LizyHoeffer]

So APR includes one time fees and interest over the life of your loan. When using APR to compare it’s really just to show you at a glance which loan has higher costs

[@OlenaGerry]

Thank you :)

[@WhenThingsGoSouthNJ]

Thanks for the video!

[@jlbmovers963]

Im thinking about refinancing but want to make sure I make the right decision . I need help doing this can you help ?

[@avantgohel_]

Thank you so much

[@taigaplays6300]

I love your energy

[@socraticmathtutor1869]

I'm not an expert, but it seems to me that you should focus on the interest rate, and then bring the fixed costs into the calculation separately. From what I'm hearing from this video, APR tries to combine the two, with no doubt very confusing consequences!

[@y.y1678]

Hi, I am doing a car lease, the interest rate is 1.25% and the APR is 3.55%, how can it be that high? 4 year lease of approximately $41k

[@johanp162]

You have to be careful when using the term APR since it is an ambiguous term. What confuses in consumer loan and bank statements is more often the stated APRC (Annual Percent Rate of Cost) . The APRC is formally defined as: The nominal annual interest level that equates the present value of all drawdowns with the present value of all repayments (the present value cashflow=0) . (In definition it is written as a mathematical equation - two geometric sums equated). This is the official definition used by both FCA and EU regulations. It is not in itself a terribly complex thing to explain but it takes a bit more math and an hour and half or so to explain to a layman. It is often misunderstood and even banks calculate it incorrectly. Especially when used for very short loans (a couple of months) where it can give numerically very high values (can easily be >> 10000%) due to the often very high fees on short loans. The detailed calculation is also dependent on the date convention used (the simplest being if you take into account leap year or not). Formally then EU regulation is not clear on this (and worse - is even self contradictory). However, the FCA regulation clearly states that leap years needs to be taken into consideration and that a month is 365/12 days.

[@ryanyopp4440]

If the apr is at a glance easy way to see the total cost. What is a desired apr you should try to get?

[@LizyHoeffer]

This is hard to answer because there are so many variables, but when you are comparing quotes you can tell the higher fee loans by comparing the APR. Does this make sense?

[@QuikVidGuy]

so I think the part where I got confused was that it sounds like APR takes the amounts like fees that on their initial document are typically presented to us as fixed numbers, and then works them back into a percentage of the main loan along WITH the interest So I think I get it now: If I have $500 fee associated with a 10K loan, that's going to end up adding (or at least incorporating) something like .02 into the final APR after the interest is compounded and extrapolated and all that

[@QuikVidGuy]

this was the part of freshman math i actually wanted to learn but the first part where i started having real trouble

[@traviusbroadnax5048]

Thank you

[@mariafitts]

So not only are they charging you an interest rate for letting you borrow the money for the house payment alone but they are charging you another higher interest called the APR for that same loan plus the other paperwork fees for the loan. Wow , that is a big rip off

[@user-tk7zn6pc5x]

Then - buy with cash if you want ;)

[@jeraldschumann3305]

I wonder if we can avoid interest and fees when withdrawing cash at the ATM :3

[@LizyHoeffer]

Yeye Games you shouldn’t be paying interest at the atm unless you are withdrawing from a credit card. Check with other banks about free checking

[@Pravin_Yeshua_BTC]

Thank you. It finally makes sense. ✅

[@ahripark2593]

I’m trying to get a loan and there’s a interest and apr? I’m really confused So will I be paying interest and an annual fee on top of the loan? :/

[@LizyHoeffer]

Hi Ahri, this is a great question. I would love to answer this on my LIVE tomorrow at 6PM! I hope to see you there!

[@angelicahernandez8817]

Hi Lizy! Thanks for the informative video. Question: What would be a big difference in interest and apr numbers that would be a cause for concern?

[@LizyHoeffer]

If you are comparing lenders it will show you who has the higher lender fees. Often times loan officers will lower the cost of prepaid items to make their closing costs appear less when those items have nothing to do with the cost of the mortgage. A higher APR will mean that their finance costs are more expensive.

[@alialmulla9798]

So is APR calculated once the loan is repaid since costs associated with early repayment wont be relevant if there is no early repayment on the loan?

[@LizyHoeffer]

Ali Almulla APR is calculated during your loan process and disclosed on your closing disclosures and loan estimates. The calculation is done for a 30 year term so if you pay early, you reduce the amount of overall interest, therefore you drop the apt. Does that make sense?

[@mariemedeiros1756]

Hello, can you tell me what is a 35.98% interest rate?

[@Sadsoft]

Thanks

[@matthewlcooke]

Great video. One question, if closing costs and fees (title, appraisal) are a one-time payment and not financed how is the APR not the same as the note rate? Thank you and I have subscribed!

[@LizyHoeffer]

matt cooke great question! The note rate is the rate you pay interest at for the borrowed amount (loan). APR includes interest and onetime fees... which is why it is higher

[@elviwilliamvalenzuela7278]

@@LizyHoeffer even if these onetime fees are already paid up front?

[@LizyHoeffer]

Elvi William Valenzuela yes... it includes every fee to obtain financing

[@chardieboydorz1236]

Still don’t understand the apr concept if closing costs and fees are already paid up front

[@LizyHoeffer]

chardieboy Dorz the idea is that you can compare loans at a glance and see which one is more expensive based on how high the annual percentage rate. Does that help?

[@r81365]

I do not understand still. So I have a lot of credit car debt. The loan I am approved for is $10,000 with 21.87% APR and it shows 17.13% interest 3 year loan. Also there is a $631 origination fee. With a $357.15 minimum payment per month. My goal is to pay $500 or $400 a month. Is this okay?

[@thapelo_mahloko]

Great video

[@JesusGonzalez-kh8df]

One question: So if you take out a loan and you have to pay X% of interest anually , that interest you're paying is like you returning a small part of what they loaned you?

[@Westernbell56]

The interest is more what you are paying the lender for borrowing the funds in the first place. Any interest you pay is going straight to the lender’s pocket. The loan amount is considered the principal and any interest you pay does not go towards that balance. I hope that makes sense lol

[@sunoveristambul]

How yo calculate apr?

[@LizyHoeffer]

Peter Gabriel here is great website they shows you the math!!! www.supermoney.com/calculate-the-apr-loan/

[@juanclopezcolin4978]

Truly Helpful Information Thank you. Wife and I are getting ready to buy investment property

[@juanclopezcolin4978]

Hopefully you you create a video about requirements to qualify for investment properties loans thanks

[@TheMoneymaker90210]

Great video... Definitely subscribing... Quick question tho. Let's say you're doing a payoff on a vehicle loan or home loan. Is the reason the total payoff amount drops because you are paying off the loan with the interest rate of the current principle balance (excluding APR?)

[@danielashleybaker]

I think you are confusing something. Generally, your "payoff" of a vehicle loan is the remaining balance that doesn't "drop", with the exception of reducing over time as you make payments. You can pay if off by paying all of that as a lump sum and avoid interest associated with the interest rate.

[@LizyHoeffer]

I think you are referring to the “amount financed” when calculating APR the prepaid finance charges are deducted from the total loan amount. This confuses lots of borrowers but your payoff is any unpaid balance and interest accrued up until the day you pay and close out the loan. Does that help answer your question

[@Mangokyaw]

so since the "interest rate" is a monthly extra fees on top of the principles that means the APR is a combination of both principles and the Interest rate? explain to me plz.

[@RoyceMartin_]

Loans are for businesses, we are the original creditor, we don't consume loans, we consume the property. We're EXTENDING credit, search up TITLE 15 USC 1602 - definitions and rules of construction. This information is misleading.

[@felipea1844]

Interesting information. APR% is total of what? I have to pay 3% plus 3% for what? I have to pay a total 6% on a $100,000 loan for 30 years? I'm still confused. 🤔😁✝️🇺🇸

[@MoniqueD305]

Damn. Watched the whole video. Still confused lol

[@a.k.slzr5]

If your APR contains several one time fees at the beginning of a loan, does that mean that it will to change (lower) the following year?

[@LizyHoeffer]

so APRs on your loan documents show you the total cost of financing for the amoritzation term. The only way to lower it effectively os by paying more money towards your principle balance.

[@phaldaz]

Doing these videos without a board that someone can screenshot as a memory tool is not ideal, but I get it, it takes more time to do so

[@BillyCarsley]

I thought APR and APY were BOTH used on a home loan

[@ritefirst2282]

Great information, I’m considering refinancing at a 4.4 interest and 5.5 APR on a $200,000 loan with a 15yrs or 30 yrs. option. I’m definitely leaning toward the 15 yrs, due to having 23 yrs. remaining on current mortgage, what advice can you provide about these options?

[@chrislambert9435]

Interest Rates could feasibly go down much further because Scientists tell us, actually Matter (solids) only begin to form at -273.15 Celsius or 0 degree Kelvin. So its really at 0 degree Kelvin that anything should start So it is possible for the Central Bank rates to go down to -273.15

[@jakobh6257]

Great info, thank you 👍

[@BlackDesertSnake]

I enjoyed this

[@gladys1942]

Thank you Lizy

[@LizyHoeffer]

You are so welcome ❤️

[@melanieyang6958]

What's more important? Interest rate or Apr? Does it matter?

[@radc3365]

Was wondering if you think this is a good deal, seller is buying 5k in closing and 5k Ernest money (towards closing also) to start escrow and extra 3k out of pocket to get my interest rate at 2.875% va home loan for 30 years

[@LizyHoeffer]

Rad C IT depends on how long you will own the property for and the amount of savings vs the amount you would pay without a buy down. See if you can get a loan comparison worksheet. You will want to compare long term savings and find out when your break even point is. Would love to review this with you in more detail. Let me know

[@Jhollywood3698]

Awesome

[@addya4011]

I still don’t get it

[@diegolasso3153]

Still don't get it , so why not saying you interest rate is you APR . Isn't that simplistic that way 🤔

[@LizyHoeffer]

Because it include one time costs. So it is not a reflection of what you pay for interest

[@raghuramreddybeemreddy3465]

Very informational, but background music is irritating. Why would someone need background music while talking.

[@LizyHoeffer]

Appreciate that you found it helpful! We took away the music on future videos :)

[@helenkotowske3829]

Yes, video background music I sc irritating and makes it hard to listen. Thanks for eliminating yours.

[@KrishnaYadav-ht5yl]

I love you I love you

[@petesmith3186]

This music is way too loud.

[@NativeNewYorkCityGir]

That tune gave me a headache.

[@adhsnuggles]

Great video How is a consumers interest determined?

[@lindale2107]

Music is distracting

[@kimberlygriffin6136]

Got @2.75 but apr @2.99 and thank you for the information.

[@michaeladams2077]

Hows 2.75 and Apr 3.75?

[@terigopula]

5 minutes of example with numbers is better than 500 minutes of theoretical explanation. Good video though :)

[@Citizen__X1]

Video idea: EAR vs APR and wether the laws should change.

[@joelzrythm5344]

Yup, still lost

[@mannydecastro6934]

Me too

[@cobiznizcoles5338]

Ugh wat u say again

[@orophessstv]

You should quote an example and solve a numerical. That's it.

[@LizyHoeffer]

Thank you for the feedback

[@clintonb3612]

Great info but it is really amazing what we allow banks and other humans to do in society. Such a shame.

[@zainabebrahim8392]

Well presented and also you are very beautiful .. Thanks

[@mariafitts]

I am worried and lost , my loan officer never communicates with me so I don’t know what’s what

[@davidmalawey]

How can they have a whole video explaining APR without any numbers? Dislike.

[@LizyHoeffer]

it was to explain the general concept. I hope you found a different video with what you were looking for :)

[@comodice905]

Bl9ke insane shipmate