{"id":18110,"date":"2023-06-26T12:35:55","date_gmt":"2023-06-26T12:35:55","guid":{"rendered":"https:\/\/www.loanry.com\/blog\/?p=18110"},"modified":"2023-10-15T11:35:09","modified_gmt":"2023-10-15T11:35:09","slug":"good-apr-personal-loan","status":"publish","type":"post","link":"https:\/\/www.loanry.com\/blog\/good-apr-personal-loan\/","title":{"rendered":"What is a Good APR for a Personal Loan?"},"content":{"rendered":"

[vc_row][vc_column css=”.vc_custom_1697369704038{margin-top: 1em !important;}”][vc_single_image image=”18159″ img_size=”full”][\/vc_column][\/vc_row][vc_row][vc_column el_class=”column”][vc_column_text]Getting a personal loan can be a wise financial decision that may help you pay off some debt and consolidate your payments into a single package. Depending on your needs, it can also provide financing for a career change or new business. However, you shouldn\u2019t just take the first loan you find but must do careful research to ensure you find the best option possible.<\/p>\n

For example, you need to ask yourself, \u201cWhat is a good APR for a personal loan?\u201d correctly answer this question. Thankfully, we\u2019ve done the hard work for you! In this article, you\u2019ll learn about APRs on personal loans, what constitutes a reasonable APR, and things you can do to improve yours. This information should ensure you receive an outstanding personal loan![\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column el_class=”column”][vc_column_text]<\/p>\n

What Is the Best APR for a Personal Loan?<\/h2>\n

A good APR (annual percentage rate) for a personal loan will vary heavily based on multiple factors (which we\u2019ll discuss later) but typically range from 4-36%<\/strong>. Currently, the average APR for a personal loan for someone with a credit score of 720 or higher is about 20% for 3-5 year repayment schedules.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column el_class=”column”][vc_raw_html]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[\/vc_raw_html][\/vc_column][\/vc_row][vc_row][vc_column el_class=”column”][vc_column_text]<\/p>\n

What Exactly Is an APR?<\/h3>\n

The APR on a personal loan\u00a0isn\u2019t just the interest rate. Instead, it consists of the interest and the fees that you pay over a year for the money that you\u2019ve borrowed. It\u2019s a figure used to compare the cost of borrowing for things like auto loans<\/a>, mortgages, personal loans, and credit cards<\/strong>. Companies use it to determine how much you\u2019ll pay in total and how much you pay monthly.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column el_class=”column”][vc_column_text]<\/p>\n

Your Lender Can Help You<\/h4>\n

As you might imagine, your APR is a reasonably complex element and requires a lot of careful calculation to fully understand. Your lender will sit down with you and explain your APR to ensure that you know how it was calculated and why they\u2019re offering it to you. That said, you should understand this process yourself to improve your negotiations.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column el_class=”column”][vc_column_text]<\/p>\n

How Do Companies Calculate Your APR?<\/h2>\n

Before setting up your personal loan, lenders will take your interest rate and use it to calculate your APR. The process is the same for all personal lenders, meaning that you can expect similar results from most. Here\u2019s an example of this process in work:[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_raw_html]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[\/vc_raw_html][\/vc_column][\/vc_row][vc_row][vc_column el_class=”column”][vc_column_text]If all this is confusing to you or you consistently get a number that doesn\u2019t make sense, you can\u00a0use an APR calculator<\/a>\u00a0to gauge your rate ahead of time. This step is brilliant because it gives you an idea of whether your lender is providing a fair rate to you or not. While a higher offered APR doesn\u2019t mean they\u2019re trying to scam you, it\u2019s worth pointing out to them in negotiations.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column el_class=”column”][vc_column_text]<\/p>\n

Does APR Differ From Your Interest Rate?<\/h2>\n

While some lenders may use the terms \u201cAPR\u201d and \u201cinterest rate\u201d interchangeably, they\u2019re\u00a0not at all the same thing<\/strong>! In fact, as you guessed by reading the section above, the interest rate is used to calculate the APR and is a separate thing altogether. It represents the cost of borrowing money as a percentage, while the APR includes all the costs of borrowing<\/strong>, which includes the interest rate, fees, and other charges. That means your APR is almost always higher than your interest rate.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_single_image image=”18125″ img_size=”full”][\/vc_column][\/vc_row][vc_row][vc_column el_class=”column”][vc_column_text]<\/p>\n

Can Your Interest Rate and APR Be the Same?<\/h3>\n

Is it possible that your APR and interest rate will be the same? There\u2019s an infrequent possibility that your lender may charge no fees with your loan: in that case, the APR and interest rate are the same. Don\u2019t hold your breath waiting for that to happen, though: there\u2019s a better chance of getting struck by lightning while winning the lottery during a shark attack.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column el_class=”column”][vc_column_text]<\/p>\n

Which Factors Affect APR?<\/h2>\n

When lenders set your APR, they typically look at several different factors, including your interest rate. They\u2019ll\u00a0decide your interest rate\u00a0based on multiple elements. These can vary depending on the lender but usually include things like your:<\/p>\n