APR
APR, short for annual percentage rate, puts the yearly cost of borrowing into one rate on the balance owed, taking in the interest charged plus the set-up fees a lender is required to include.
An APR exists so that two offers can be compared with one number. The rate on the note is what drives the payment; the APR takes that rate and folds in the required charges for setting the loan up, so a low rate carrying a heavy origination fee cannot look cheaper than it is. Between two loans of the same size and the same term, both held to the end, the lower APR is the cheaper loan.
In the United States, the Truth in Lending Act sets which charges belong in a disclosed APR, which is why a mortgage advertisement shows a rate in large type and a slightly higher APR next to it. Deposit accounts there fall under a different rule and quote APY, a number that already contains compounding, so the two are not interchangeable units. The APR against APY calculator converts one into the other.
The thing most people get wrong is treating an APR as what they will actually pay. It assumes the upfront fees are spread across the whole term, so it flatters a loan held to the end and understates the cost of one repaid early. Clear a 30 year mortgage in six years and the fees were divided by 30 years of arithmetic but paid out of six. APR is a fair comparison only when you expect to hold both loans about as long.