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What Is A Payday Loan APR

by: EthanHunter
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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.

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 stands for Annual Percentage Rate, which is basically the annual interest rate on the loan itself. With large loans, like a home loan, or small business loan, the APR is usually very low, mostly because the loan is paid back over a long period of time.

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

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.

To show just how astronomical these rates are consider that APR rates for payday loans are most often between 250% and 390%! This in itself is a ridiculous number but then when you consider the loan itself is small, if it can be paid back quickly, the rate is not so painful.

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

When searching for a payday loan APR should be something that you keep at the top of your head. The lower the APR, less that you have to pay when you're going to pay back 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.

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.

About the Author

Looking for a payday loan? Then payday loan APR should be something that should be your topmost priority. The lower the APR, the lesser you have to pay when you're going to pay back your loan. Payday Loans Online with Instant Approval

What Is A Payday Loan APR

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