Interest rates are applied over each and everything whether it’s a mortgage (4%), car loans (8%) and credit cards (19%). There is much hue and cry that interest rates on the loan are all time low and have been very low levels for sometimes now. When the interest rates of loans from non-conventional lenders (such as payday loans) appear very high, it catches the attraction of the people.
When you get used to take out loans with the interest rates of 4-19%, a loan with the interest rate of 1,700%, 2,500% and even 4,000% comes as a big shock for you. Actually, it’s a misleading data and is not a realistic way of comparing the expenses of different types of loans.
The APR stands for Annual Percentage Rate and in fact, it’s the interest payable on the borrowed loan amount and other charges of the loan termed as APR rate. It is a useful way to estimate the cost of a loan that is taken out for a year.
But, for short duration loans, such as payday loans which are taken out for only a few weeks, it is a way that simply doesn’t add up. That is because of the shorter the term of the debt, the Higher the APR turns out to be. So, you get perplexed.
The loan providers of payday loans have to mention and annual percentage rate. But, it is not that what you actually pay off. You can get a more cost-effective solution from banks and traditional financial firms. You can also compare the interest charges of several loan providers to get a loan deal with moderate interest charges in case you are trying to get short term loans.
When you get used to take out loans with the interest rates of 4-19%, a loan with the interest rate of 1,700%, 2,500% and even 4,000% comes as a big shock for you. Actually, it’s a misleading data and is not a realistic way of comparing the expenses of different types of loans.
The APR stands for Annual Percentage Rate and in fact, it’s the interest payable on the borrowed loan amount and other charges of the loan termed as APR rate. It is a useful way to estimate the cost of a loan that is taken out for a year.
But, for short duration loans, such as payday loans which are taken out for only a few weeks, it is a way that simply doesn’t add up. That is because of the shorter the term of the debt, the Higher the APR turns out to be. So, you get perplexed.
The loan providers of payday loans have to mention and annual percentage rate. But, it is not that what you actually pay off. You can get a more cost-effective solution from banks and traditional financial firms. You can also compare the interest charges of several loan providers to get a loan deal with moderate interest charges in case you are trying to get short term loans.
