What is the APR?
Annual percentage rate, or APR, is the term used for the interest rate calculated for an entire year, rather than a monthly charge on a personal loan, credit card, vehicle loan etc. The finance provider averages this amount over the full term of the loan, so that you know at the outset just how much you will have to pay back on your loan each month.
People need personal loans for a variety of reasons, like financing home improvement plans, buying a new car, unforeseen medical bills, and anything else the household cannot pay out of the general budget.
Getting the best APR rate can cut a chunk of interest from the loan repayments, and is a huge money saver for borrowers.
There is a lot of competition by loan companies which are vying for business, and this puts prospective clients in a favourable position to negotiate for good deals. If you are able to secure a great deal, it can save you thousands of dollars in the long run.
Here are some of the top ways to get a lower APR loan.
Decide whether or not you need to fix your credit score.
If your credit score is on the low side and you want to improve it, this can help you get a better rate should you want to take out a personal loan. However, before you decide on fixing your score, think about how quickly you want the loan. A credit score cannot be fixed overnight, and it may take several months before you see an improvement.
You may still qualify for a loan even if your credit score is a bit low, and if you are anxious for the cash, your best bet is to go for the lowest rate you can get, although it might higher than you wanted to pay.
Some ways to improve your credit score:
Always research lenders that you want to do business with. Opt only for those who are reputable and legitimate, with good reviews. Shop around for the best rates, and if necessary, work hard on improving your credit score which can save you interest charges on future loans.
Unless you are in dire financial straits, do not go for what is known as a payday loan. The interest rates are absolutely exorbitant, and you could end up in debt spiral that will not be easy to escape from.
A personal loan, with the best APR you can get, is a far better option.
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