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The annual percentage rate on a loan is the amount the lender would sbi personal loan disbursement process if you borrowed the money for a year, as a percentage of the original loan.
For instance at 40 APR, to borrow for a year you'd be charged 40 of the original loan, on top of paying it back. So if you borrowed ВЈ100 at 40 APR for a year, you'd have to pay back the loan plus ВЈ40. The APR is sometimes referred to as the 'interest rate'. However it also includes any other charges and administration fees, except where they are avoidable, such as late repayment fees.
Why an annual rate. I'm only borrowing for a month or two. When lenders advertise loans, they must show the APR by law.
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