APR stands for Annual Percentage Rate and indicates the true cost of borrowing money from a lender. It includes the interest rate a lender levies along with other fees.
Well, the interest rate is the annual cost of borrowing a loan. In contrast, APR is the rate of interest plus other charges or fees like the loan origination fees, closing costs, mortgage insurance, etc., to take out a loan.
That’s why your APR is usually higher than your interest rate.
If you are shopping around for loans, you might do the APR calculations on your own to find the best deal. So, to find the APR on your loan, follow these steps:
But you don’t need to do any complex calculations. Enter your loan details and let us do the math for you.
With a fixed APR, the rate does not change over time. If you take out a loan with a variable APR, its rate can rise and fall. Usually, a variable APR depends on the prime rate index.
Usually, the APR depends on your credit score. The higher your credit score, the lower your APR will be.
If you qualify for a loan with an APR below the national average, then you may call it a good APR.
For example, as of September 2021, the average APR of credit cards is about 15.56%. So, if you qualify for a credit card with an APR below this value, you can consider it a good APR.
If you use credit cards (which is also a type of loan), you can avoid paying APR. For that, you will have to pay off your credit card balance in full and within the grace period.
Yes, it’s possible to take out a loan with 0% APR. You need a good credit score to qualify. Here are a few examples of 0% APR loans:
Generally, lenders ask for a good credit score of about 690 or above on the FICO scale to extend credit at 0% APR.
Credit cards can have different types of APRs, like:
With an 0% APR loan, you won’t have to make any interest payments for an introductory period. After that period ends, the creditors will levy a regular APR on the remaining balance, if any.
With a deferred interest loan, if you fail to repay the balance amount within the introductory period, you will have to pay 100% of the interest costs that have accrued during the deferred interest period along with interest on your unpaid balance.
You need to have a decent credit score to qualify for a low APR credit card. If you have a low credit score, you need to show your credit responsibility.
If your credit score is low because of unpaid debts, you can opt for our debt consolidation program and pay off your debts with ease.