A 29-year-old father of one who got into a spiral of debt with a payday loan from an online lender. For example, extending the length of your loan may reduce the size of your monthly payments, but it will increase the total amount of interest you pay over the life of the loan. Similarly, simply choosing the loan with the lowest interest rate may prove more expensive overall if that loan has a much longer term length than a different loan with a higher APR but shorter term.The Annual Percentage Rate shows the percentage rate of interest that you'll pay over a year on money you've borrowed. It's commonly used when taking out credit products like credit cards, personal loans, and car finance. It provides an easier way to compare various credit options from different providers to get the best rate using the correct APR calculation formula.
If you are carrying a prior balance, then taking out a cash advance can add further complications. The good news is that your credit card issuer is generally required to apply your payment (above the minimum) to the card balance with the highest interest, which may be a cash advance. The bad news is that you'll continue accruing interest on any remaining balance that you haven't paid off. This could make it more difficult to pay off any debt already on your card when you took out the cash advance.
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