---
id: faq-0008
title: "What's the difference between APR and interest rate?"
category: faq
subtopic: financing
page_type: faq
source_url: "https://www.castlevwcars.com"
tags: ["financing", "apr", "interest-rates"]
questions:
  - "What does APR mean?"
  - "How is APR different from interest rate?"
  - "Which one affects my monthly payment?"
related: [financing-faq, loan-terms, monthly-payment-calculator]
dealer: Castle Volkswagen of Schaumburg
---

Good question! **APR** (Annual Percentage Rate) includes the interest rate plus other costs like lender fees, rolled into one yearly rate. **Interest rate** is just the cost of borrowing the money itself. When comparing loans, APR gives you the fuller picture because it accounts for all charges. Both affect your monthly payment-a higher APR means you pay more overall. Lenders by law must disclose APR, which makes it easier to compare offers from different sources. When our finance team presents loan options, they'll show both the rate and APR so you understand the full cost. For exact numbers on your specific loan, call (847) 593-4700 and our team will walk you through it all.