If you are confused by the difference between APR and your interest rate, you are not alone. Check out this short, educational video as we talk about Annual Percentage Rates on this edition of Ascentra Making Cents. To see more videos of our monthly financial education segments like this one, head to our YouTube channel.
When determining which loan is right for you, it’s important to look at the APR or Annual Percentage Rate.
APR is an annual rate charged for borrowing money. Simply put, it’s the price tag on your loan.
Don’t confuse the interest rate with the APR.
An interest rate represents the current rate you pay on a loan whereas the APR includes the interest rate plus other costs and fees.
You may find a loan with a lower interest rate, but when you add up costs and fees associated with it, you get a higher APR, therefore costing you more in the long run.
Before getting a loan, make sure to look at both the interest rate and the APR and compare them with other lenders.
Also, do your research and build a relationship with a trusted loan officer to make sure you get the best deal.
And always remember, a good credit score will help you get the best APR with any lender!
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