APR, How It Affects Your Loans and How to Lower APR
One thing that many have not come to appreciate as yet I the fact that APR is indeed costing them money and lots of it for a fact. Looking at this from this particular end, it is so obvious that one of the things that you need to look into and take into consideration is your APR. With a lowered APR, you will be in such a position where you will pay much less for loans.
By far and large, for far too many of us, this proposition may sound too good to be true but the fact is that there are a lot of mathematical facts that support this and by crunching up the figures on your loans, you get to see this with so much clarity. For instance, take a case where you look at a slight variation in your percentages for loan rates, as little as 0.25% in an instrument such as a mortgage that would add up to $4000 and over in the entire life span of the LittleLoans.
This post is going to detail some of the ways that you can get such huge savings by simply making efforts to lower your APR.
So what is APR in the first place? Precisely defined, APR is the annual percentage rate and it is the index that defines the much it is going to cost you to take out a loan or borrow money for a year’s time. Take an example where you are planning to go for a personal loan worth $10000 at an APR fixed at 8%. In such a case, you realize that you will be paying $80 for every $1000 borrowed for the 12 month period. At the end of the deal, you will have paid $960 for the $10000 loan, all in interest at the end of it all. Read on and see some of the things that happen to determine one’s APR.
By far and large, if at all you want to know how to lower your APR, it would be so advisable for you to know of what it is that actually determines it in the first place. Whenever you will be making an approach to a bank or any other lender for a loan, some of the things that they will often look into as they review your application are the two basic ones; your ability to pay the loan as agreed and your creditworthiness. In all these factors, when determining your APR, the one that will play a major role in this regard is your credit score. When it comes to these, bear in mind the fact that the higher your credit scores, the lower your APR and the lower your credit scores, the higher will be the APR.