Definition
The representative APR of a loan is the effective rate of interest that is paid by at least 51% of a company’s customers including all charges and fees.
- The idea is to give you a fair indication of the actual total cost of a product.
- This was introduced as a result of companies advertising low-interest rates (to appear cheap) but then adding lots of other fees and charges making the overall cost higher.
- So the representative APRs listed below are for that lender.
- For our current representative APR click to see home page.
- Therefore over 51% of our customers paid an effective rate of [our current representative APR] for their loan with the lender they chose.
- For a full definition see the bottom of the page.
What’s the Representative Example?
A representative example provides a detailed illustration of the costs associated with a specific loan, using the representative APR (Annual Percentage Rate) for that product. It is designed to give you a clear understanding of the typical monthly payment and total amount repayable for a given loan amount and term.
For Allcreditloans.net, the Representative APR is 79.5% (variable). An example of a representative loan from Allcreditloans.net is as follows: Borrow £1,200 for up to 75 days. The total amount repayable is £1,506. This includes an interest charge of 0.34% per day, amounting to £306, with an annual interest rate of 124% (variable). Please note, these figures are subject to affordability and your credit score.
Our Lenders’ Representative APRs:
Our Lenders Representative APR’s*
-
- 118 Money – 49.9% APR
- 1 Plus 1 – 47.8%
- Auden – 235.83%
- Bamboo Loans – 59.7%
- Cash Float – 611.74%
- Credit Spring – 43.1%
- Creditstar – 100.96%
- Dot Dot Loans – 1228.67%
- Drafty – 89.7%
- Everyday Loans – 99.9%
- Fernovo – 1244.0%
- Fintern – 89.7%
- Fund Ourselves – 504.7%
- Guarantor My Loan – 48.9%
- Lending Stream – 1,333%
- Loans 2 Go – 770%
- Mal – 504.7%
- Money Boat – 939.5%
- Morses Club – 498.78%
- Mr Lender – 1,256.4%
- My Finance Club – 1,299%
- One Stop Money Shop – 295.60%
- Salad Money – 69.9%
- Savvy – 1291.1%
- Tappily – 49.7%
- Tick Tock Loans – 1297.93%
- TM Advances – 180.8%
- UK Credit – 26.9%
* These figures are accurate as of the time of publishing but may change at any time at the discretion of the individual lenders.
Find out what you could borrow and the costs
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‘Representative APR’ Full Definition
- Definition
- APR stands for “Annual Percentage Rate.”
- “Representative APR” is a financial term used primarily in the context of lending and borrowing.
- Purpose
- It represents the total cost of borrowing money on a yearly basis.
- It includes not only the interest on a loan or credit card but also any additional fees that might be charged.
- Legal Requirement
- Lenders in the UK are legally required to display the Representative APR.
- It ensures that consumers have a clear understanding of the cost of borrowing.
- Comparative Tool
- Helps consumers compare different credit offers and products.
- The lower the Representative APR, the cheaper the cost of borrowing (in general terms).
- ‘Representative’ Aspect
- This means that at least 51% of people who are accepted for the credit product will get that rate.
- However, not everyone will get the same rate; it might be higher, especially if the individual’s credit history isn’t strong.
- Included Costs
- It encompasses all mandatory costs, such as arrangement fees or monthly charges.
- Does not include voluntary extras, such as payment protection insurance.
- Calculation Factors
- It’s based on a set borrowing amount over a defined period.
- Different lenders might have different scenarios for calculation, which makes comparing APRs directly essential for consumers.
- Variability
- Some APRs are variable, which means they can change over time based on external economic factors.
- Others are fixed, meaning the rate remains consistent throughout the lending period.
- Not the Only Consideration
- While Representative APR is a critical tool for comparison, other factors like loan term, monthly repayments, and overall loan amount should also be considered.
Understanding the Representative APR is crucial for consumers in the UK looking to borrow money, as it provides a comprehensive view of the potential costs associated with a credit product.
‘Representative Example’ Full Definition
- Definition:
- A “Representative Example” is an illustration provided by lenders, typically found in advertisements and promotional materials for credit products.
- Legal Requirement:
- Due to UK regulations, any lender advertising a credit product with an interest rate or an amount of credit must provide a Representative Example to help consumers understand the potential costs.
- Purpose:
- Helps give potential borrowers a clearer understanding of the costs and terms they might expect from a credit product.
- Aims to promote transparency and allow consumers to make informed decisions.
- Typical Components:
- Amount of Credit: The total sum of money being borrowed or the credit limit on a card.
- Interest Rate: Typically displayed as a yearly rate, often as a fixed or variable percentage.
- Representative APR: The annual percentage rate that at least 51% of borrowers will receive.
- Total Amount Repayable: The full amount the borrower would have to pay back, including the borrowed sum and any interest.
- Term: The duration over which the money is borrowed, e.g., a 12-month loan.
- Monthly Repayment: How much the borrower will need to pay back each month.
- Not Guaranteed:
- It’s called “representative” because it represents the terms that at least 51% of accepted applicants will receive.
- However, individual terms can vary based on personal circumstances and creditworthiness.
- Application:
- Can be found in advertisements for various credit products, including personal loans, credit cards, and car finance deals.
- Comparative Tool:
- Potential borrowers can use Representative Examples from various lenders to compare the potential costs and terms of different credit offers.
- Not the Only Consideration:
- While a Representative Example provides key financial details, potential borrowers should also consider other factors like flexibility, customer service, and additional benefits or charges associated with a credit product.
The “Representative Example” acts as a standardized reference point for consumers in the UK, ensuring that they can understand and compare the potential costs and terms associated with a credit product.
