If you are looking to take out a guarantor loan, you’ll see the APR listed by the lending company. This is important information and you need to know the APR, or Annual Percentage Rate, to make sure that you make the best decision for your needs. The APR is a determination of the total amount of money you need to pay for a loan over a full year. The APR includes any fee that has to be paid while it also includes the interest rate that a lender will apply to the loan you have taken out. If you are taking out a loan over a period longer than a year, as many people do, you’ll find that the total interest and fees are added together and then they are averaged to create the average yearly cost of the loan.

The APR basically provides people with a percentage of the cost of the loan. The larger the level of APR, the more a person will end up paying for the loan. APR is important because it is a standard measurement, and this allows people to compare the different loans on offer. Lending companies are legally obliged to provide a genuine APR before people take out a loan, and you need to ensure that you spend time reviewing what your options are.

Understand the different types of APR

It is important to be aware that representative APR and typical APR are different things, every lender will utilise the same methods to determine the APR but there are variables in play which can impact on the APR figure. This is down to the fact that different people are eligible for different rates of APR and some candidates will have to pay different fees or charges.

Factors which impact on the APR include the credit history of the applicant, any history that the applicant has with the lender, how much money is looking to be borrowed and how much money is looking to be borrowed. These are all key factors in determining the APR and this is why it makes sense to find the relevant APR on offer from a lender as opposed to the one that is stated as being made available to all applicants.

This brief guide will hopefully answer your questions of what is guarantor loan APR but if you need any further assistance, there will always be plenty of support on offer.