What Is APR And How Might It Affect My Loan

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This full form of APR is the Annual Percentage Rate. It is an expense that you have to bear for borrowing money. If you pay your borrowed amount on time then you don’t need to pay any APR interest but if you somehow failed to repay the borrowed amount on time then you will be liable to pay some kind of interest rate. And that interest rate gets decided based on the APR assigned to you. Let us give you an example here to make this clearer for you. Imagine you are using a credit card and you haven’t paid the money on time. In such cases, you will be charged some interest amount which will be calculated based on APR. Now let us make you understand how this APR could affect your loans.

Can Increase The Interest Amount

Whenever you apply for a loan your lender could assign some interest rate by looking at the APR. And this APR somehow depends on the type of mortgage you are choosing or the type of credit card you are interested in. If you pay the amount on time you won’t need to worry about the APR. But if you are delaying paying the amount or have missed any of your payment dates then this APR can make the interest percentage higher on your loan. Although there are options of bad credit same day loans for you still you will be liable to pay a higher amount of interest rate if you have a comparatively higher APR on your other loans.

Affects Your Credit Score

Lower APR always indicates a good credit score. So if you want to maintain a healthy credit score then you must pay the borrowed amount on or before time. This will lower your APR and as a reward, you don’t have to worry about high paying interest rates anymore. And getting your loan sanctioned would be easier for you.

Decreases Your Chance Of Getting Any Further Loans

A financial emergency can come at any time. No matter how many mortgages own right now you can still require more for emergencies. And here a higher APR can become a strong barrier. It can affect your credit score and eventually lenders reject your loan applications. In such cases, you have only the option of bad credit same day loans where a credit check is not compulsory. So yes a higher APR can decrease your chance of getting any future loans.

Increases The Financial Burden

A bad credit score and a higher APR can feel like a big financial headache sometimes. So if you wanna set yourself free from such a headache then just pay the borrowed amount on time.

Thus to conclude, APR can affect your loans in a direct or indirect manner. So just play safe and pay the amount on time.

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About Author

I am Catherine. This blog is my hobby as I love to read and write. I could not decide weather to choose one topic for writing or to do it all. Finally I though to go all out and write and share whatever I feel like on a given day. So I usually write on things I am passionate about and sometime not so usual ones.

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