There are two ways to figure out how much a loan will cost, and people often get them mixed up. The annual percentage rate (APR) is one, and the interest rate is the other. The interest rate is just a percentage, and it changes directly with the amount borrowed. The APR, on the other hand, takes into account all costs, including interest, setup fees, and annual fees. So, a loan with a 10 percent APR is cheaper than a loan with a 10 percent interest rate and extra fees. But it's important to note that the APR is the standard number that loans must use to advertise, because it's the law. Also, fees that can be avoided, like late payment fees, don't have to be included in the APR.
So, if you want a loan with a low interest rate, the first thing you should look at is the APR, which is a better indicator of the cost than the interest rate alone. Now comes the fun part. On the internet, there are hundreds of loan companies that want your business. There are also a lot of comparison sites that let you directly compare one loan to another and, in most cases, take you straight to an application form when you've decided on a product.
Because of this instant comparison, lenders have had to step up their game when it comes to figuring out their APRs. This means that cheap loans are no longer just for people who know what they're doing. With so much competition, a quick look on the Internet can turn up great deals for anything. If you already owe money on credit cards, store cards, or other loans, you might want to look again to see if you could pay them off faster and pay less each month. You'll almost certainly find a better deal for less money.
