The principal amount borrowed is divided by the interest rate plus total fees this figure is then divided by the total number of days in the loan term. How is APR calculated?ĪPR stands for Annual Percentage Rate and can help you to calculate the true cost of your loan. As market conditions change, your monthly payment may move up or down, depending on what your interest rate is at the time. VariableĪ variable interest rate moves up and down over time, based on an underlying index rate like the prime rate. Be mindful that the interest rate may change based on other factors, like your credit score, so read the fine print before committing to a loan. A fixed-rate loan has an interest rate that does not fluctuate with the prime interest rate.
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