APR, How It Affects Your Loans and How to Lower 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. 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. 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.
This may sound as being too good to be true but doing the math, it gets to be a lot clearer. This is when you look at the fact that with just a 0.25% difference on instruments such as mortgages, you can see these add up to over $4000 over the life of the loan.
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.
To begin with, let’s get some of the basics of APR, know what it is in preciseness. 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. Putting figures into it, take for instance a case where you would be going for a personal loan worth $10000 and the APR is 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. See the following underlined factors that actually do get to determine your APR.
The first step that needs to be taken when it comes to the need to lower APR is to know what they are that actually determine the index. In the event that you approach a bank or some other lender for a loan, some of the things that they will take a look at are your creditworthiness and your ability to repay the loan. Looking at the two, the one that will come into play majorly when it comes to establishing your APR is your credit score. And in this regard, know that there is an inverse relationship between the two in which case, where you have a high credit score, your APR will be lower and vice versa.