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's APR?
Many people don't know what an APR really is, or what a payday loan APR is at all.
APR is the acronym for "Annual Percentage Rate". This annual rate is what is attached to a loan. In the case of something large, perhaps a mortgage loan or even a smaller loan for business purposes, the percent of the APR is generally low. The reason is that these loans take longer to pay back to the lender.
On the other hand, a payday loan APR is somewhat different.
How Does Payday Loan APR 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.
You can normally find APR numbers between 250% - 390%, which is rather large, until you consider that you're borrowing just a small amount, and you're going to pay it back quickly.
Some states have regulated the highest possible APR that payday loan companies are allowed to use, along with other things - like how long a loan can be out, and if you can renew it or extend it in any way. These laws vary wildly - while some states have very strict laws, some have none at all.
When Searching for a Payday Loan...
When you go looking for a payday loan APR, there are a few things that you should keep in mind. That's the APR. The lower it is, the less you will need to pay when you are getting ready to pay your 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
You should borrow wisely and don't go with a company that has high payday loan APR rates or you will feel it later.
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Payday loan APR is the key. Borrow wisely! Don't opt for a company that has too high payday loan APR - you'll feel the crunch later! Payday Loans Online with Instant Approval
