Cash loan allows you to raise funds for current needs. Its offer includes all banks, as well as loan companies that offer cash loans without BIK. However, before you sign the contract and enjoy the additional cash, it is worth checking the current attractiveness of the offer. The APRC will tell you the most about the attractiveness of a cash loan. Why should you check them out?
APRC is an indicator that is given for every cash loan. It specifies the total cost of providing it. Therefore, the APRC includes interest, insurance, commissions and all other additional fees charged by the bank to the borrower. The current Annual Interest Rate will tell you the most about the terms of the cash loan. For more information about this, pay attention to when choosing a cash loan, see this article.
Why should I check the APRC of cash loans?
The APRC, ie the Real Annual Interest Rate, is valid not only for a cash loan, but also for any other loan. This parameter provides all information on the cost of the loan. Thus, it allows you to assess which banking product is the cheapest and the most beneficial. By comparing this loan ratio with each other, you can choose the best one for you. The current Annual Interest Rate is used by cash loan comparison websites.
APRC or interest rate – how do they differ
APRC is often mistaken for interest. People looking for good and cheap cash loans first check the interest rate. The lower they are, the more attractive the offer appears. The reality, however, is completely different. Even at a low interest rate, a loan can cost a lot. Why? Because banks, in addition to interest, also add commissions and additional fees to the capital they borrow, eg for insurance or consideration of an application. Such costs will not be included in the interest rate, but in the Real Annual Interest Rate.
How do you compare cash loans?
To compare the offers of individual banks in the field of cash loans, it is enough to use special comparison websites. Data from them are updated on a regular basis. Cash loan comparison websites also provide the APRC value for each banking product. It is not worth to ignore it, even if the comparison engine writes exactly what the costs of insurance, interest, commission, preparation fees or for examining the application are. This is due to the fact that the APRC contains such an important element as the time value of money, ie the time in which the borrowed money is available. The amount of the Real Annual Interest Rate also depends on him, and the principles of its operation are as follows:
- the shorter the repayment period, the higher the APRC
- the longer the repayment period, the lower the APRC.
This allows you to effectively compare loans available on the market. However, to make a proper assessment, you need to know how to read this indicator correctly and what it means. Help in this regard can be found in loan comparison websites and calculators, which automatically segregate offers from the one with the most favorable APRC.