If you have been looking for a loan, there is a very good chance that you will have come across the term APR. This stands for the Annual Percentage Rate and it is extremely important when it comes to finding the loan or finance option that is right for your needs. No matter what sort of loan or agreement you are looking to take out, the APR is something that you have to look for.
In essence, the APR is a determination of the amount of money that you’ll pay for a loan over a year. This includes any fees that have to be paid to the lender and the rate of interest that is being paid to the lender. Given that many loans last for longer than a year, you’ll find that the total cost of the fees and interest are added up and then averaged out for each individual year.
This means that the APR is provided as a percentage and it tells you how much you have to pay to borrow the money, on top of the actual loan itself. When looking to have APR explained, you’ll find that the larger the level of APR, the more money you will end up paying for the loan. This means you should look to find as small an APR as possible but of course, this isn’t always possible.
Make sure you have APR explained in a sensible manner
Lenders are legally obliged to provide you with an accurate APR before you agree a loan with them. This provides the applicant with some protection and it should help them make the best decision for their needs. While there are many different things to take on board when it comes to finding the loan that is best for your needs, looking at the APR provides you with a strong starting point that should help you decide what loan is best for your needs.
It is important to remember that every individual is subject to tests and checks, which mean that the APR listed on a site may not be the exact same APR that you end up paying. Your own personal credit report and history will influence the decision made by a lender, and this is why opting for a guarantor loan makes sense. This is because it is the credit history of the guarantor, not yourself, that is the important one in determining the APR. If you want to give yourself a chance of obtaining an affordable loan, a guarantor loan could be your best bet.