In general, when applying for a loan, salespeople will tell you a **seemingly low loan interest rate (nominal annual interest rate)**, while IRR (Internal Rate of Return) will tell you the actual true rate you're paying.

Imagine you're considering applying for a loan to buy a car. The bank might offer you several different repayment plans, each with different interest rates and repayment periods. This is where IRR comes in handy as a metric to compare these repayment plans.

Think of it like this: if you had a sheet of paper listing the amount you need to repay each month, IRR is a number that tells you, if all repayment plans are adhered to as scheduled, at what annual interest rate your loan will be repaid.

In other words, IRR tells you what interest rate this loan is at, satisfying all your repayment plans, even if your repayment amounts vary over time. So, when comparing different loan schemes, you can use IRR to help you decide which one is more advantageous for you.

In short, IRR is like a ruler, helping you gauge the relative merits of different repayment plans, making it easier for you to make financial decisions.