Almost everyone knows what APR stands for because they have seen it in home loans and other loans that they may have had to get or know about. A payday loan APR can be a hard thing to understand and for good reason.
There are many states that have regulated the maximum APR for payday loans and this is a really good thing. It's not going to be close to what you are thinking for an APR though. Try looking a lot higher because a short term loan often has a very high APR.
What is an APR?
Some people don't know what APR is, or what payday loan APR is - or if it's different at all.
APR stands for Annual Percentage Rate, which is basically the annual interest rate on the loan itself. With large loans, like a home loan, or small business loan, the APR is usually very low, mostly because the loan is paid back over a long period of time.
On the other hand, a payday loan APR is somewhat different.
How Does This Work?
Payday loan APR is a much, much bigger number than a home loan APR is - it has the highest interest rates on any sort of loan, but that's because it is a very short term loan. Usually between 7 and 14 days, these loans don't span much at all - so you usually end up only paying between $10-$40 in interest.
Normally, you will find APRs that are between 250% - 390%, which is really large except that you are just borrowing a small amount and are planning to pay it back in a fast rate of time.
Of course, there are some states that keep tight tabs on APR rates charged by these companies. Therefore, the APR allowed to charge with other factors, such as the length of the loan and whether extensions are allowed, would also be regulated. Just remember that laws are different for every state - some strict and some not so rigid.
When Searching for a Payday Loan...
If you are in the market for a payday loan APR, then remember that the lower the interest rate the less amount of money you would be required to pay back on the actual loan.
Watch out for fees, too - while the APR might look attractive at first glance, finance fees will end up costing you twice what you're paying in interest. Keep your eye out for the best companies that offer the lowest fees, and interest rates.
Conclusion
Of course, borrowing money is serious business so it is important to choose one that can get the payday loan APR that will not put you in further debt.
There are many states that have regulated the maximum APR for payday loans and this is a really good thing. It's not going to be close to what you are thinking for an APR though. Try looking a lot higher because a short term loan often has a very high APR.
What is an APR?
Some people don't know what APR is, or what payday loan APR is - or if it's different at all.
APR stands for Annual Percentage Rate, which is basically the annual interest rate on the loan itself. With large loans, like a home loan, or small business loan, the APR is usually very low, mostly because the loan is paid back over a long period of time.
On the other hand, a payday loan APR is somewhat different.
How Does This Work?
Payday loan APR is a much, much bigger number than a home loan APR is - it has the highest interest rates on any sort of loan, but that's because it is a very short term loan. Usually between 7 and 14 days, these loans don't span much at all - so you usually end up only paying between $10-$40 in interest.
Normally, you will find APRs that are between 250% - 390%, which is really large except that you are just borrowing a small amount and are planning to pay it back in a fast rate of time.
Of course, there are some states that keep tight tabs on APR rates charged by these companies. Therefore, the APR allowed to charge with other factors, such as the length of the loan and whether extensions are allowed, would also be regulated. Just remember that laws are different for every state - some strict and some not so rigid.
When Searching for a Payday Loan...
If you are in the market for a payday loan APR, then remember that the lower the interest rate the less amount of money you would be required to pay back on the actual loan.
Watch out for fees, too - while the APR might look attractive at first glance, finance fees will end up costing you twice what you're paying in interest. Keep your eye out for the best companies that offer the lowest fees, and interest rates.
Conclusion
Of course, borrowing money is serious business so it is important to choose one that can get the payday loan APR that will not put you in further debt.
About the Author:
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