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Explain Why APR Is Important

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With so many different things to consider when looking at obtaining a loan, it is easy to see why many people need assistance or a push in the right direction to ensure they make the most informed decision. There are a number of things to consider when looking for a loan and if you don’t know what is important, it makes sense to obtain help or assistance. If you need someone to explain why APR is important, please ask for assistance because this will make the process a lot easier for you.

explain why APR is important

APR is important because it should allow you to compare the different options that are being presented by loan companies. The lower the APR, the better because this will leave you paying less money to pay off your loan. You need to make sure that you find the most suitable APR but you also need to ensure you find the most suitable monthly payments. Some people are keen to pay off their loan as quickly as possible, and are happy to pay more each month to be free of debt in a shorter period of time. Other people are more focused on paying a lower level of money every single month. To achieve this, you end up paying more money because this is a longer process.

Find out why APR is important

Knowing the representative APR on offer from a company is a good starting point in finding the loan that is best for your needs but you also need to focus on what matters most to you. This is why you cannot find all of the information you need on a website because the solution or option that is best for you is personal to you. It would be impossible for a website to provide a tailored response to every individual who is considering obtaining a loan, and this is why it doesn’t happen.

It is also impossible for a loan company to provide the APR for every possible applicant that lands on their site, which is why they provide the representative APR. This is the APR that is obtained by the majority of applicants, so it can be used as a good starting point but many applicants are unable to benefit from this APR. This is why you should never fully base your hopes on the stated APR because you may not receive this figure when you apply.

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A Representative Example

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48 Monthly Repayments, borrowing £2000
Total Amount Payable: £4067,04
48.9% APR Representative
Rate of Interest 25.84% Fixed Flat Rate
Monthly Repayment: £84.73