APR stands for Annual Percentage Rate. This is the cost of your credit expressed as a yearly rate. APR is used to calculate how much interest you pay. APR describes the interest for a whole year. For example, interest at 10% on $120 would be $12 for the year.
At IJLfinancial, (and most, but not all other lenders) interest is calculated daily. What this means is every day your loan is outstanding you owe a little bit more interest. You can calculate exactly how much interest using the following formula:
Principal outstanding * APR / 365 * number of days
For example if you have a $500 loan with a 150% APR for 12 days you will owe $24.66 in interest; The calculation is broken down like this:
$500 * 1.5 / 365 * 12 = $24.66
With this loan, interest is accruing at $2.05 per day. You should still pay close attention to APR because it is the number that is being used to determine how much interest you are paying every day!
Notice: This is a simple explanation and the specifics may vary with things like effective APR, compounding or other variables.
