2007-10-30 06:20:05 · 6 answers · asked by Anonymous in Business & Finance ➔ Credit
APR is the real interest rate. Before this standard method of calculating interest was introduced, banks would make up a number.
These days, the interest rate you pay depends on your credit score. "typical APR" is what they would charge you if your credit rating was so good you didn't need the loan.
2007-10-30 06:25:32 · answer #1 · answered by Anonymous · 0⤊ 0⤋
APR is not the "real" interest rate. The interest rate is the number they use to figure out how much interest you owe.
You know when you go to the grocery store, you see two bottle of detergent. One has 100 ounces and the other has 64 ounces. There's usually a little tag that tells you how much they each cost per ounce. The APR is the little tag on a loan.
There's a very complicated formula to figure it out, but it takes a variety of factors into consideration, and gives you the cost of acquiring the loan in the form of a rate. Every time you get a rate, you should also be getting an APR. When you line up the loans, the one with the lowest APR is the least expensive loan to buy. You have to think of the loan as a product you purchase.
This is not necessarily the best loan choice for you. You may need the loan with the lowest payment instead. So you don't want to use the APR as the sole reason for choosing one loan over another. You have to look at all the factors, the rate, the APR, the payment and the closing costs to select the right loan for you.
2007-10-30 06:42:56 · answer #2 · answered by Debdeb 7 · 0⤊ 0⤋
Annual Percentage Rate (APR) is an expression of the effective interest rate that the borrower will pay on a loan, taking into account one-time fees and standardizing the way the rate is expressed. In other words the APR is the total cost of credit to the consumer, expressed as an annual percentage of the amount of credit granted. APR is intended to make it easier to compare lenders and loan options.
The APR is likely to differ from the "note rate" or "headline rate" advertised by the lender, due to the addition of other fees that may need to be included in the APR.
In the US and the UK, lenders are required to disclose the APR before the loan (or credit application) is finalized. Credit card companies can advertise monthly interest rates, but they are required to clearly state the annual percentage rate before an agreement is signed. APR is a term used with regards to deposit accounts as well. However, when dealing with deposit accounts, Annual Percentage Yield APY or Annual Equivalent Rate AER is the number to be quoted to consumers for comparison purposes.
2007-10-30 06:23:42 · answer #3 · answered by Anonymous · 0⤊ 0⤋
This Site Might Help You.
RE:
what is typical APR % and what is APR?
2015-08-10 08:59:30 · answer #4 · answered by Marena 1 · 0⤊ 0⤋
You got to be kidding! I get at least one advertisement in the mail each day for credit cards offering 9 to 12 percent. If you have a poor credit rating, stay away from credit cards for a while. Use your debit or prepaid credit cards only to build a better credit rating.
2016-03-13 13:42:24 · answer #5 · answered by Joni 4 · 0⤊ 0⤋
Annual Percentage Rate... The tipycail bit depends on the type of loan it is
2007-10-30 06:22:59 · answer #6 · answered by Irish816 3 · 0⤊ 0⤋