Annual Percentage Rate (or APR as it is more commonly known) is an accurate measure of the cost of credit on a yearly basis. In general terms APR allows you to calculate the cost of a loan in terms of a percentage, with the loan that has the lowest APR being the best. It is a way to compare the costs of a loan and can be a good way of contrasting the percentage costs on different loans. With an APR calculator figures can be made easier to understand.

An APR calculator will also work out the APR of loans with regular and fixed repayments including additional fees and charges made either at the beginning or the end. As with all online calculators, this breaks down the figures into sizeable and understandable chunks which makes it a lot easier to get to grips with outgoings and the overall impact on finances. Many people often ask why use APR?

The main answer to this is that loans can be extremely confusing and there are always a number of figures that make the whole process rather confusing. With an APR calculator it will break figures down and make the figures seem more manageable and understandable. It is worthwhile remembering that you cannot simply rely on an APR quote to evaluate a loan however. In order for you to make it as accurate as possible you will need to look at every aspect and every single charge and expense in relation to the loan, this will then determine whether or not you are getting a good deal.

If you have taken out, or are considering taking out a loan, an APR calculator is the best thing to enable you to work out an effective Annual Percentage Rate. If you struggle to keep tabs on money going in and out and what figures belong where, this is a great way to get your head around it and keep track of what's going on with your finances. If you look after your finances, your finances will look after you.