I’m applying for a loan and I was approved at 11.99% but when I went to sign the paperwork it said 12.68%. I asked about it and the loan officer said that it was because of a $50 finance charge that was not interest bearing. I don’t understand how this works…
In: 5
APR includes up front charges for originating the loan as your loan officer specified.
You are only paying 11.99% with $50 up front. This is what you agreed to.
The APR tells you that this loan is equivalent to paying a 12.68% interest rate with $0 upfront fees. If you didn’t have that $50 fee then the APR and the base rate would be the same.
APR makes it easy to compare loans with different interest rates and fees.
Latest Answers