Annual percentage rate or APR as its often referred too is a calculation intended to allow consumers to benchmark the cost of borrowing. There are many other factors to be considered but generally speaking the lower the APR the better.
APR is worked out by looking at the amount of interest you have to pay and the cost of any other fees. APR also looks at the effect of how often interest charges must be paid and takes that into consideration.
The monthly interest rates often advertised are not the same as APR because they don’t include all fees so make sure you compare like for like when shopping around for the best deal. Comparing an APR with an advertised interest rate can mislead you about which is the better deal.
The APR is often based on the perceived risk of the lender, so anybody with bad credit history may end up having to pay a higher APR. The APR on secured loans is affected by the amount your borrowing in comparison to the value of the home its secured against.
The loan calculator and lending tables can help you check out how the APR effects the repayment of debts.Comments Off on What is APR?