What is the APR for a loan and credit?
APR is one of the most common terms on lenders' websites. You have certainly come across him many times when looking for loan or payday loans. Do you know what exactly is hidden under this acronym? What APR is beneficial for you? Check what is the APRC.
When applying for a loan, it is worth taking a careful look at all the parameters and fees associated with making a commitment. It is very important to pay attention to the APR index. What is this?
APRC - what does it mean?
Actual Annual Interest Rate - this is what the acronym APY stands for. This parameter includes all costs that you have to cover by taking out a loan or a loan. These include, for example:
- commission for granting a loan - a one-time fee, constituting a percentage of the amount borrowed, is charged by the bank or loan institution after starting the loan or credit facility.
- interest - their sum depends on the interest rate on the loan or credit facility - the higher it is, the more interest you will pay; the loan interest rate is determined on an annual basis, e.g. as 6% per annum,
- preparation fee - all additional costs that the bank or loan institution requires from you to prepare your loan agreement,
- application processing fee - a one-time fee for verifying creditworthiness and correctness of the completed application,
- costs of additional services - e.g. administrative fees,
- possible loan insurance - if you choose it or it is required by a bank or loan company.
What to look for when choosing a loan?
The APRC decreases with the extension of the loan period. This means that if you take out a loan for a longer period, the APRC will be lower, but at the same time your total cost will increase. A loan proposal with a low APRC does not have to be the best option for you (due to the high total cost).
When choosing the amount and duration of the loan, pay attention to a representative example that is placed on the lender's website. However, remember that it may look different in your case (depending on the amount, number of installments or additional costs related to the loan).
If you are going to compare two or more loan offers, make sure that they have the same repayment period, the same amount and the same type of installments (equal or decreasing). Also, make sure that your offers have commission and insurance included.
APR 0% - what is it about?
Many companies offer a payment of the first loan with an APR of 0%. This offer is addressed mainly to young people who are just starting to shape their credit history and are looking for loans with the lowest costs for them.
In fact, when deciding on an online loan with an APRC 0%, you will pay back exactly as much as you borrowed - but on one condition. This will only happen if the loan is repaid on time - then you will not incur additional costs.
Always pay attention to your financial possibilities - apply only for loan amounts that you are able to pay off. Individually set the dates in which you will pay installments. Calculate how many installments are paid, the offer will be the best for you.
Don't make commitments that you can't afford. If you have any questions about the process of applying for a payday loan or the APRC itself, write in the comment. We will be happy to help you.Return