Unless you’re borrowing money from your mom and dad (or perhaps even then), you can expect your installment loan to come with an interest rate. However, because many interest rates are described in terms of months and neglect to include fees, it can be difficult for borrowers to assess the true cost of the loan. To figure out how much the loan will cost in total, you will need to factor in the annual percentage rate (APR). An installment loan APR communicates the interest rate of the loan for the entire year including any required fees. To better understand the APRs of installment loans, check out the FAQs below.
Installment Loan APR
What is an annual percentage rate (APR)?
As we mentioned above, an annual percentage rate (APR) expresses your loan’s interest as a yearly rate and also incorporates the lender’s fees (i.e., any fees required to finance the loan). The borrower can use this single value to compare the loans of various lenders, as all lenders are required to disclose their APR under the Truth in Lending Act. To learn more about APRs, check out this previous blog post.
How will an APR affect my installment loan?
In fact, the APR of your installment loan doesn’t technically affect it. It simply relays the cost of your installment loan in a different way, allowing borrowers to more accurately assess the expenses involved. In evaluating the APR, you can better understand the loan’s interest rate and fees.
Can I make my loan more affordable?
If you want to lower the cost of your installment loan, take your time and research potential lenders carefully. Compare the annual percentage rates of your contenders, shopping around for the lowest APR available. In addition, once you secure a loan, make timely payments and pay off the loan as early as possible to limit related fees and interest charges.
So before you apply for a loan, be sure to check out its annual percentage rate (APR). Not only will it help you assess your yearly interest charges, but it also takes additional fees into account. Look for a lender with an affordable installment loan APR and check out their payment schedules, flexibility, terms and conditions, and customer service. Education and careful decision-making are the best ways to save money and reduce stress throughout the borrowing process.
If you’re interested in taking out an installment loan, contact Advance Paycheck Online today. We offer online installment loans to residents of Illinois, Utah and Wisconsin, and our APRs vary by state. To learn more about our fees schedule and APRs, check out the Loan Costs and Terms page for your state:
Our flexible payment schedules will help you pay off your loan as soon as possible, and we prorate the fees involved so that if you pay off the loan early, you will have very few fees to pay. To get started, please contact us online or give us a call at 1-815-436-4242. We would be happy to help!