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What does APR actually stand for and how is it calculated?
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Re: What does APR mean?
Annual Percentage Rate
Usually reflects your FICO score(s) -
Re: What does APR mean?
APR = Annual Percentage Rate. APR is the total cost of credit to the consumer, expressed as an annual percentage of the amount of credit granted. This cost is calculated to include interest and all other described charges, but excludes penalty fees.Comment
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Re: What does APR mean?
If the APR of something is 5% you don't pay 5% every month but 1/12th of 5%. Its this compounding effect which makes interest a terrible thing for you to pay, but a great thing to lend to someone.
IF you have 3 credit cards, each can have a separate APR- or Interest Rate. Your interest rate on a mortgage is also expressed in terms of APR. Whatever the rate divided by 12 to see how much interest you're paying monthly.
You don't have an overall APR like you would think of a credit score. Your APR on something doesn't equate to your FICO Score. Its how you pay on those credit cards, and how much credit they extend to you, and how much of that credit you use, which in part, comprises your FICO score.Comment
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