Knowing the APR of a loan can help you compare it to other loan offers. This helps you determine the best choice for your financial needs.
Credit card companies and lenders typically have a range of available APRs depending on the borrower’s financial profile. If you have steady income and a good credit score, you will qualify for a lower APR than the rate offered to a borrower with poor credit or a limited work history.
When evaluating the APR on a loan offer, consider these factors that affect the available rates:
Your credit history
The current prime interest rate
Competing rates for similar loans
Interest rates for credit cards vary dramatically by factors such as bank and credit history. The average APR ranges from about 13.33% to 29.99%. With a loan comparison tool like LendingTree, you can review available interest rates and other terms side-by-side.
For business loans rather than personal financing, try a resource designed especially for commercial credit such as Rapid Finance or Biz2Credit.
If a loan offers a low introductory APR, read the fine print to see how much your interest rate will rise after the first few months to get a true picture of cost. The card agreement will also indicate when the lender can change the APR. Usually, banks can raise your interest rate for any reason, including missed payments, an increase in the Prime Rate, or a dip in your credit score. However, they must provide 45 days written notice before doing so.