When it comes to explaining APR, the percentage figure that lets you determine how much money you pay each year, and in total, to service a loan, it is important to know that every individual will be provided with their own APR. While lenders will state a representative APR on their website or in any documents they provide to people, each application is reviewed on its own merits. This means that if you have a poor credit rating, you may find that you are not eligible to receive the positive rates that a company promotes or advertises.

There are a number of factors involved with calculating APR and when explaining APR, it is important to know what these factors are. If you are aware of the factors involved with impacting on APR, you can take steps to improve your record. Some of the most common factors associated with the APR a person receives include:

• The applicants credit history
• The applicants history with the lending organisation
• The amount of money that the applicant wishes to borrow
• The length of time the applicant wishes to borrow the money over

These are all factors that will impact on the APR a lending company is willing to provide and you can see how this will vary from applicant to applicant. One applicant may find that they are reviewed in a positive manner and are provided with a good APR while other applicants may find that they are reviewed in a negative manner and they will receive an APR that will leave them paying off a lot of money to obtain a loan.

Review the cost of APR when explaining APR

There is a need to carefully review your options and if the cost of the APR is too high, you really need to question whether taking this loan is good or right for you. If you find yourself paying too much money to service your loan, you could end up in financial trouble, so take steps to review all of your options.

If you are looking for a more attractive rate of APR but your credit history is against you, taking out a guarantor loan may be your best option. This is a style of loan where the credit history of the guarantor is the important factor, which could see you saving money in how much you have to pay to the lending company. When it comes to being smart with your finances, take steps to know what your best solutions are.