Loans and interest rates aren’t the most fascinating of subjects but you do have to have a basic understanding of these matters if you are thinking of applying for a loan and need to calculate how much it will cost.
Log book loans
If you are thinking of applying for a logbook loan, even though the weekly repayments from companies, including carcashpoint.com, are small you must realise that interest payments will form part of the weekly repayment instalment. Whenever you borrow money, you will always have to repay that money as well as additional interest, and the interest will vary from company to company.
What is interest percentage?
According to the financial website Money Saving Expert, the percentage interest is the percentage of the amount of money that you have borrowed and is added onto the loan repayment amount. You will always be aware of the interest rate so that you can work out if you can repay the loan. Banks, payday lenders and logbook loan companies all adjust their own interest rates, so even though the Bank of England is currently setting an interest rates of 0.5% this doesn’t mean that UK companies have to set the same rate.
Annual Percentage Rate (APR)
The Financial Conduct Authority, (FCA) states that ‘APR stands for Annual Percentage Rate and you can use this to compare the affordability of different credit and loan offers.’ Some people find that they face problems as a result of the language of the loan agreement. For example, the wording ‘representative APR means that 51% of accepted applicants may have to pay one amount, and 49% may be offered a different higher rate.’ The key is in the term ‘representative.’