{"ok":true,"canonical_url":"https://dealroom.so/glossary/effective-interest-rate","api_url":"https://dealroom.so/api/public/glossary/effective-interest-rate","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"effective-interest-rate","term":"Effective interest rate","aka":"Annual Percentage Rate (APR)","group":"The loan itself","definition":"This is the actual annual interest rate paid on a loan or investment, taking into account compounding and all fees. It gives you the true cost of borrowing.","what_it_means":"Your SBA 7(a) loan will have a stated interest rate, but the effective rate includes the SBA guaranty fee, ongoing servicing fees, and any lender closing costs. Compare the effective interest rate across different lenders to understand the total cost of each loan option.","url":"https://dealroom.so/glossary/effective-interest-rate","official_sources":[],"related":[{"slug":"variable-rate","term":"Variable rate","url":"https://dealroom.so/glossary/variable-rate"},{"slug":"spread","term":"Spread","url":"https://dealroom.so/glossary/spread"},{"slug":"wsj-prime","term":"WSJ Prime","url":"https://dealroom.so/glossary/wsj-prime"},{"slug":"ongoing-servicing-fee","term":"Ongoing servicing fee","url":"https://dealroom.so/glossary/ongoing-servicing-fee"}],"related_questions":[{"question":"What happens to the interest rate on an SBA 7(a) loan if general market interest rates go down significantly?","url":"https://dealroom.so/sba-loans/basics/what-happens-to-the-interest-rate-on-an-sba-7-a-loan-if-general-market-interest-rates-go-d"},{"question":"What is the Wall Street Journal Prime Rate's role in SBA 7(a) loan interest rates?","url":"https://dealroom.so/sba-loans/basics/what-is-the-wall-street-journal-prime-rate-s-role-in-sba-7-a-loan-interest-rates"},{"question":"What are the maximum allowable interest rates for variable rate 7(a) loans, including the permissible spread?","url":"https://dealroom.so/for-lenders/questions/what-are-the-maximum-allowable-interest-rates-for-variable-rate-7-a-loans-including-the-pe"},{"question":"What is the difference between a fixed interest rate and a variable interest rate on an SBA 7(a) loan?","url":"https://dealroom.so/sba-loans/basics/what-is-the-difference-between-a-fixed-interest-rate-and-a-variable-interest-rate-on-an-sb"},{"question":"How is the interest rate cap determined for a variable rate 7(a) loan?","url":"https://dealroom.so/for-lenders/questions/how-is-the-interest-rate-cap-determined-for-a-variable-rate-7-a-loan"},{"question":"Are SBA 7(a) loan interest rates typically fixed or variable, and what base rate index is commonly used?","url":"https://dealroom.so/sba-7a/questions/are-sba-7-a-loan-interest-rates-typically-fixed-or-variable-and-what-base-rate-index-is-co"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Effective interest rate","url":"https://dealroom.so/glossary/effective-interest-rate","source_type":"DealRoom Data"}}