Monday, January 25, 2016

How Significant is the APR in Short Term Loans

From home loans to car title loans the options available on the market today are endless, and promise you financial assistance to meet just about any financial need! 

Before committing to a specific loan, it’s important to know exactly what assistance you need, what the loan offers, and what is expected of you in terms of the qualification criteria and the loans repayments.

If you are the owner of a bad credit score, then this eliminates a significant chunk of loans that you can qualify for, as credit is used to by many lenders to determine the risk they taking in lending to you. 

Car title loans welcome all applicants despite their credit score, and these loans are approved with no credit checks.

Car title loans are short term loans that offer the applicant many benefits. When comparing the different loans on the market, it’s important to compare apples with apples, to make sure that you are getting a true reflection of what you are applying for and what is expected of you in return.

With all loan types, the APR or Annual Percentage Rate is a significant indicator in explaining the rates to you for your specific loan. 

It is sometimes difficult to compare loan benefits when some loans are short term and other are long term, as the periods that the loan runs for vary and significantly change the costs. The APR is a standardized measurement of the cost of credit, taken at a yearly rate.

It may seem strange to have such a measurement for a short term car title loan, but this helps you to understand and compare the costs across the board. 

With this value you could clearly understand how much it would cost you to pay off this short term loan, in the period of a year, which is a standard repayment time for all loans.

The APR is significant with short term loans, as different lenders charge different rates. Instead of looking at the numbers at face value, understanding the entire loan process with make sure that when you take out your car title loan, you will choose a lender who offers low interest rates and fees.

The APR is also determined based on a few criteria, such as how the repayments are structured, monthly, weekly, or every second week, what the length is of the loan period that you have taken out, and the time between when you receive the cash loan and the first required repayments. 

All of these factors are very important when it comes to a car title loan. There are so many providers to choose from that it is essential to make sure that you are getting the best terms and conditions. 

Be sure to take a look at all of the lender's terms and conditions, and they should also disclose any additional fees, including penalty fees for making early loan repayments. When you’re armed with this knowledge, your entire loan process is sure to be a success!

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