Loans and Credit Cards-Tips to Help Lower Your APR
By and large, APR happens to be one of the elements of loans and credit facilities that really robs us of money and lots of it as a fact but has not been noted by many. As such, if you look forward to unlocking the doors to financial freedom, one thing that you need to look into is your APR. One of the things that having a lowered APR allows you is the fact that it gets you such an opportunity to bear much lesser costs for your loans.
For many, this prospect seems to be too good for being a reality but the fact is that with some math done on loans, you get to see the sense. This is even looking at the fact that with just a percentage variance as little as 0.25% on an instrument such as a mortgage would sum to over $4000 over the life of the loan.
If at all you are asking yourself just how it is that your lowered APR will help you lower you costs for loans and as such help you save as much, read on in this post and see just how this is possible.
So what is APR in the first place? Basically, APR is the annual percentage rate and this is an indicator of how much you will be paying in costs for you to borrow money for a year. As for an example, consider a case where you are planning to take a personal loan whose worth is $10000 and you have an APR fixed at 8%. In such an instance, you notice that on every $100 borrowed, you will be paying in interest for every $1000 for the 12 months. At the end of the deal, you will have paid $960 for the $10000 loan, all in interest at the end of it all. See the following underlined factors that actually do get to determine your 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. In most cases, when you go to a bank for a loan, they will basically look at two things and these are your ability to pay back the loan and your credit score. Looking at the two, the one that will come into play majorly when it comes to establishing your APR is your credit score. In this regard, it is good enough to note the fact that the APR and the credit score have an inverse relationship in which case it remains to be that with a higher credit score, you have a lower APR and a lower credit score gets you a higher APR.
Attributed by: Resources