What is real APR?

‘Real’ APR is the rate of interest that actually has to be paid by you, instead of the representative rate often advertised and recommended by the lenders. This is calculated by the lender, which they do on the basis of how ‘risky’ a borrower they recognize you to be. Now, mentioned below is the criteria the lenders use to decide how ‘risky’ you are for them.

They use several suitable sources that help them to decide the rate from, which include:

1)Your credit record.

2)They consider the dealings that may have taken place between you and the lender previously if any.

3)Your financial position (whether you are doing well financially or not).

The more these factors are in your favour, the more stable you seem in the eyes of a lender. Therefore, this sums it up to the fact that you'll be seen as ‘low risk’ which makes you more fit to be accepted for credit with the ‘lowest APR’.