Personal Finance & Money Asked by Gadam on February 20, 2021
I am using the NerdWallet Refinance Calculator to compare current loan with new loan.
https://www.nerdwallet.com/mortgages/refinance-calculator/calculate-refinance-savings
My question is should I put in the interest rate or the APR where it is asking for ‘interest rate’?
For the New Loan, it is also asking for loan costs so which led me to believe I should put in the interest rate (my understanding is APR is the combination of interest rate + loan costs). But the original loan information does not ask for Loan costs making this confusing.
Thanks.
Use Interest Rate. The APR is the effective rate when closing costs and prepaid points are taken into account (to be a more accurate comparison between loans). The Interest Rate will tell you what your payment will be (along with the amount borrowed and the length of the loan, of course).
Answered by D Stanley on February 20, 2021
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