APR plays a significant role while availing a loan. The APR definition is the total amount of interest that will apply on top of the amount you owe on a year-to-year basis. As a result, APR provides you with a better understanding of the actual costs of credit card usage or applying for student loans, a mortgage, or any type of loan.
The APR depends on the worthiness of your credit and the current borrowing rates. There are many types of credit card APR rates are:
- Cash advance APR
- Purchase APR
- Introductory APR
- Penalty APR
- Fixed vs. variable APR.
The APR stands for annual percentage rate. There are different credit cards, and companies which will offer you other APRs and the best APR, when you have a lower credit score. Primarily, the APR rate must be discussed with you upfront while you are getting credit cards or loans. There could be a no-interest period. The high APR rate can make the amount you owe in interest, inflate, very fast.
The APR helps you compare loans for more than just their total cost. It provides you with a more accurate figure of the yearly cost of a loan. The formula to calculate the annual percentage rate is [{(Fees + interest/principal}/n]*365*100 here 'n ' is the Personal loan tenor in days.
In case you need a personal loan to meet your urgent expenses, you can avail of a personal loan from Bajaj Finserv and get hassle-free funds in just 24 hours. This NBFC also provides pre-approved loans which can be availed by simply sharing your basic details.
