The Annual Percentage Rate (APR) is the total cost of a loan, expressed as a percentage rate of interest, which includes not only the loan’s interest rate, but factors in all the costs associated with making that loan, including closing costs and fees. The costs are then amortized over the life of the loan. Banks are required by the federal Truth-in-Lending statutes to disclose the APR of a loan, which allows borrowers a common ground for comparing various loans from different lenders.