Most of us, when choosing the most suitable cash loan, usually pay attention to its lowest interest rate. It seems to us then that such an option will be most beneficial for us. Nothing could be more wrong! Well, the main indicator that we should take into account during credit verification is APRC. What is and how to calculate its height? Here are some practical tips.
APRC in cash and loans. Why is it worth calculating?
APRC of a loan or cash loan is otherwise the Actual Annual Interest Rate, the amount of which is expressed as a percentage. Therefore, if we borrow any amount of money from the bank, there is no option that we would not have to pay for this “borrowing”. This interest rate applies to, for example, mortgage and consolidation loans as well as smaller loans. The APRC, on the other hand, will help us calculate how much such a loan will cost us.
See also what is the interest rate on the loan and what it depends on.
Actual Annual Interest Rate close-up
In other words, the APRC is an accurate calculation used to compare credit costs, which in turn are offered to us by various financial institutions. It is also worth mentioning that this calculation takes into account: the minimum interest rate, the lender’s commission, as well as additional costs, which is an obvious example that during the selection of a favorable loan should not only be suggested solely by its interest rate.
How to calculate the APRC?
Contrary to appearances, the information for calculating the APRC can be found very simply. It turns out that the network will find everything we need to properly carry out this process, namely the necessary formulas to calculate the Real Annual Interest Rate of the loan that interests us. Unfortunately, the calculation process itself is not easy, especially when we have to add up all additional costs. Therefore, to make everything clear, it is worth going to a specialist who will guide us in the right way. You can also use online calculators to calculate APRC and credit comparison websites. It is also important that if we are looking for a reliable lender – a calculator that calculates all the real costs of our loan should also be on its official website. The APRC amount is also an important factor in all credit rankings that we use to check current bank offers.