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The APR is the percentage of a car loan amount you'll pay yearly in interest and fees. Knowing what APR is on a car and how to calculate APR can help you save.
To find a credit card’s APR, add the current U.S. bank prime loan rate and the interest rate the credit card issuer charges. The U.S. prime rate is currently 8%.
For example, on a credit card with a variable APR between 13.99% and 28.99%, a 25% APR might be a good rate for someone with fair credit, but it would not be a good rate for someone with good credit.
The term annual percentage rate of charge (APR), [1] [2] corresponding sometimes to a nominal APR and sometimes to an effective APR (EAPR), [3] is the interest rate for a whole year (annualized), rather than just a monthly fee/rate, as applied on a loan, mortgage loan, credit card, [4] etc. It is a finance charge expressed as an annual rate.
Legally, an indirect “loan” is not technically a loan; when a car buyer obtains financing facilitated by a dealership, the buyer and dealer sign a Retail Installment Sales Contract rather than a loan agreement. The dealer then typically sells or assigns that contract to a bank, credit union, or other financial institution.
A $25,000 car loan financed over five years at a 4 percent interest rate requires a monthly payment of $460. You can use an auto loan calculator to do the math for your prospective loan.
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