51735 Articles

Most people know what ‘APR’ stands for, as they’ve seen it with home loans, and other sort of big pieces of money - but often times, a payday loan APR can be a very daunting thing, and for good reason.

Many states have regulated the maximum APR for payday loans, which is a good thing - but don’t think that it’s only going to be something like 10! A short term loan often has high APR.

What is an APR?

Some people don’t know what APR is, or what payday loan APR is - or if it’s different 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.

However, with Payday Loan APR, it works a little differently.

How Does This Work?

Payday loan APR is a bigger number than the home loan APR because it has one of the highest interest rates on any sort of loan because it is so short term. These loans are normally between 7 and 14 days so they are very short so you normally only pay around $10-$40 in interest.

Normally, you will find APRs that are between 250% - 390%, which is really large except that you are just borrowing a small amount and are planning to pay it back in a fast rate of time.

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 You Are Looking For A Payday Loan

If you are in the market for a payday loan APR, then remember that the lower the interest rate the less amount of money you would be required to pay back on the actual loan.

However, sometimes people overlook the fees. What happens is that they see the APR and believe it is reasonable but once fees are added, they realize they are paying outrageous fees for a loan. Therefore, it is always best to look for loan companies that offer not only a low APR, but also low fees.

Things To Remember

Of course, borrowing money is serious business so it is important to choose one that can get the payday loan APR that will not put you in further debt.

Tags: Loans