great APR at National Small LoanAPR is one of the most important aspects of any loan. It tells the borrower how much it will cost to borrow that money, and it gives a direct way to compare one lender to another.

But let’s remember that the “annual percentage rate” is more than a number, its an equation. It represents two different parts of the loan: the interest, and the length of the loan.

In other words, you can move faster than the speed of APR. Paying the loan back quickly will save you money. The best way to cut costs when you borrow money is to be able to repay it as fast as you can!

What is APR?

APR stands for Annual Percentage Rate. This is a percentage that shows what the actual cost of your loan is over the course of a year. The rate is what percentage of the borrowed amount you are charged annually.

As a quick example: A $1000 loan with 25% APR will cost you $250 in interest over the course of one year. This means the repayment amount would be $1250.

A smaller loan of $100 with an APR of 50% would cost $50 for the year, making the total repayment amount $150.

Seems pretty straightforward, right? It is!

But what happens if you don’t keep that loan out for an entire year?

That same $100 loan with the 50% APR would only cost you $25 if you paid it back in 6 months. And if you paid it back in one month, it would cost you four bucks and some change.

By paying the loan back in 1 month instead of twelve, you have saved over $45 in APR charges.

Be Wary of the Fine Print!

Paying back faster will save you more money, this is true… except for when it isn’t true.

Some lenders do not have your best interests at heart. Sometimes they will sneak little details into the fine print, such as “pre-payment penalties” or “early pay off fees.”

This means that the lender will penalize you and charge you extra money for attempting to pay your loan off early! These kind of lenders want you locked into a long term loan so they can charge you the full amount of APR.


Make sure you deal with a legitimate business that allows you to make extra payments, or pay the entire loan off early with no penalties.

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