Almost everyone knows what APR stands for because they have seen it in home loans and other loans that they may have had to get or know about. A payday loan APR can be a hard thing to understand and for good reason. Interesting, the maximum APR allowed to be attached to a payday loan is regulated in many states. For the borrower, this is good but even then, often a short-term loan comes with an APR that is high. What is an APR? Although many people do know what an APR is, some do not. In fact, many people have no understanding of a payday loan APR. APR stands for Annual Percentage Rate, which is the annual interest rate that you will be paying on the loan itself. When you have a large loan, like a home or car loan, the APR is normally very low because it takes longer to pay back the loan. However, with Payday Loan APR, it works a little differently. Payday Loan APR 101 Payday loan APR is a bigger number than the home loan APR because it has one of the highest interest rates on any sort of loan because it is so short term. These loans are normally between 7 and 14 days so they are very short so you normally only pay around $10-$40 in interest. To show just how astronomical these rates are consider that APR rates for payday loans are most often between 250% and 390%! This in itself is a ridiculous number but then when you consider the loan itself is small, if it can be paid back quickly, the rate is not so painful. Of course, there are some states that keep tight tabs on APR rates charged by these companies. Therefore, the APR allowed to charge with other factors, such as the length of the loan and whether extensions are allowed, would also be regulated. Just remember that laws are different for every state - some strict and some not so rigid. When You Are Looking For A Payday Loan If you are in the market for a payday loan APR, then remember that the lower the interest rate the less amount of money you would be required to pay back on the actual loan. Watch out for fees, too - while the APR might look attractive at first glance, finance fees will end up costing you twice what you're paying in interest. Keep your eye out for the best companies that offer the lowest fees, and interest rates. Things To Remember Remember to borrow wisely, and don't go with a company that has too high of a payday loan APR - you'll feel the crunch later!
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