Glossary
APR (Annual Percentage Rate)
APR is the yearly cost of borrowing money, expressed as a percentage. Unlike a simple interest rate, APR includes fees and other charges, giving a more complete picture of what a loan actually costs.
Why it matters
Two loans can advertise the same interest rate but have very different APRs once fees are included. Comparing APRs — not just rates — is the only apples-to-apples way to evaluate loan offers. Credit card APRs are especially important since they compound on carried balances.
Example
A $200,000 mortgage at 6.5% interest rate might have a 6.8% APR after origination fees and points are factored in.
How Ray helps
Ray tracks interest charges across your credit cards and loans to help you understand the real cost of your debt. Try to see the total cost of carrying balances.
$ ray "how much interest did I pay on all my cards last year?"Related terms
APY (Annual Percentage Yield)
APY is the real rate of return on a savings or investment account, accounting for the effect of compounding interest.
Compound Interest
Compound interest is interest earned on both your original principal and on previously accumulated interest.
Mortgage
A mortgage is a loan used to purchase real estate, where the property itself serves as collateral.
Amortization
Amortization is the process of paying off a loan through regular installments that cover both principal and interest.
Credit Score
A credit score is a three-digit number (typically 300-850) that represents your creditworthiness based on your borrowing and repayment history.