Annual Percentage Rate Key Terms
Use annual percentage rate key terms to help you secure a low interest loanIf you are in charge of securing loans for your business, then you better have a good background in annual percentage rates if you don't want to end up getting a high interest rate loan that sandbags your company's finances. Knowing some annual percentage rate key terms and how to calculate the annual percentage rate can help you locate low interest loans that will give your company the financial freedom you are looking for.
Fixed annual percentage rate
Variable annual percentage rateA variable annual percentage rate is a rate that will change based on the prime rate. Depending on the prime rate, this type of annual percentage rate can either go up or down.
Federal Reserve Board. While there, spend some time reading their helpful articles on annual percentage rates.
Interest rateThe interest rate is the percent rate that the lender will charge you for borrowing money from them. The interest rate is part of the calculation of the annual percentage rate.
Default annual percentage rateThe default annual percentage rate is the rate that will be assigned to you by the lending agency if you fail to make payments on time. The default annual percentage rate is much higher than the original rate on loans and credit cards.
Prime rateThe prime rate is the rate that banks charge their customers who have the best credit. Prime rate is not the same at every bank and it does change based on what the Federal Reserve Bank does to the Federal Funds Rate.
APR calculationThe APR calculation, or annual percentage rate calculation, is a handy term to know. This will help you calculate the annual APR for any credit card or loan you consider applying for. The calculation is the interest rate plus any extra fees or costs that the lender is going to attach.
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