Personal Loans 101: Understanding APR

November 8, 2012
By Nadjha Johnson, America Saves Intern

The nature of traditional installment loans can be complicated and misleading. Luckily, The American Financial Services Association Education Foundation (AFSAEF) has created a financial literacy initiative called Personal Loans 101. Personal Loans 101 educates potential borrowers, policymakers, and other interested parties on the framework of installment loans.

In today’s world, almost everyone needs access to credit. Whether it is to make a small purchase, pay for an unexpected emergency, repair the car or obtain a mortgage on your first home, everyone must have access to affordable credit.

But how do you choose the best loan to fit your individual circumstances? If you are like most Americans, you want a loan that is relatively easy to obtain and understand. You do not want to go through a lengthy, complicated and confusing process to determine what loan or credit product best meets your needs. You want an easy way to compare them. The latest brochure from AFSAEF: Understanding APR defines Annual Percentage Rate (APR) and explains how to calculate the true value of loans. The brochure includes:

  • A comparison of different loan products by finance charge and APR.
  • Rule of thumb explaining that a smaller loan or one with a longer term has a lower APR than a larger loan or one with a shorter term.
  • A monthly spending worksheet and comparison shopping sheet to help consumers understand how much they can afford and what loan is best for them.

This Kit is FREE so don't hesitate to take advantage of this helpful information.

Personal Loans 101 makes information available to under-banked Americans that will allow individuals and families to make safe, well-informed decisions about short-term loans. It is centered on the development and promotion of a set of print and online materials, produced quarterly intended to give potential borrowers and other interested parties a comprehensive understanding of personal loan options, upon which sound borrowing decisions can be made.

More like this:

Take the Pledge

Savers who make a plan are twice as likely to save successfully. 

Take the America Saves Pledge

Tip of the Day

  • Written by Katie Bryan | December 22, 2013

    Helping yourself & your family #save successfully for the future should be at the top of your resolution list

Saver Tips and Stories View all »

Story of an Urban Professional

Written by Lindsay Ferguson | June 26, 2019

Elaine was inspired to create a new savings goal and plan with the America Saves Pledge after reading the “The Color of Money” column in The Washington Post by Michelle Singletary.

Read more...

Saving for a Bright Future

Written by Guest Blogger | April 15, 2019

Kristin Hendricks, a single mother from Texas, understands the importance of saving money and following a tight budget. She decided to make saving money a priority when she gave birth to her son.

Read more...

Saving is a Family Affair

Written by Guest Blogger | May 21, 2019

Saving is truly a family affair for Jeff’s household. During America Saves Week 2019, he pledged to save for retirement. But making a commitment and creating a plan to save isn’t a new concept for him.

Read more...

Receive Updates

Take the Pledge

Written by Super User | September 16, 2013

Start Saving

Receive Texts

Written by Tammy G. Bruzon | July 15, 2014

Learn More

Partner News & Updates

Written by Katie Bryan | October 18, 2013

Sign Up