“Annual Payback Rate” might sound logical at first glance, but it is not the standard or legal term used in lending. There is no formal financial metric by that name. The correct term is Annual Percentage Rate (APR), which is mandated by law to be disclosed on consumer loans in many countries, including the U.S. APR encompasses both the nominal interest rate and applicable fees, providing borrowers with a clear view of the total cost of credit. Confusing APR with "Annual Payback Rate" can lead to misunderstandings when comparing loan terms. While “payback” refers broadly to the act of repaying a loan, this phrase lacks the precision and regulatory definition of APR. Knowing the correct terminology is essential in financial literacy, especially when evaluating loan offers. It ensures that you’re comparing apples to apples — not misleading or unofficial concepts.