APR Explained
What the percentage on every loan advert actually tells you – and what it doesn't.
APR stands for annual percentage rate. It rolls a loan's interest and any compulsory fees into one yearly figure, worked out the same way by every lender, so you can compare offers side by side. It is useful, but it isn't the whole story.
Representative APR vs Your APR
On the advert
Representative APR
The rate that at least 51% of successful applicants responding to an advert are expected to receive. It gives you a fair idea of a typical price, which is why it appears on every page of our website.
In your offer
Your personal APR
The rate a lender offers you after looking at your circumstances and credit history. It may be lower or higher than the representative rate, depending on how the lender views your application.
Your personal APR is always shown in the lender's offer before you agree to anything.
Three Numbers, Three Jobs
Interest rate
The yearly rate charged on the money you owe. On its own it leaves out any compulsory fees and how often interest is added.
APR
Interest plus compulsory fees, expressed as one yearly figure. The best tool for comparing loans of different sizes and lengths like for like.
Total amount repayable
Everything you will pay back, in pounds. The number that tells you what the loan really costs you – check it in every offer.
Why Short Loans Can Show A Huge APR
Because APR is an annual figure, a loan lasting only a few months is shown as if its cost carried on for a whole year. That can make a short loan's APR look alarming even when the amount of interest in pounds is modest – and a lower APR on a much longer loan can still cost more in total.
That is why it pays to compare the total amount repayable alongside the APR. Credit lasting no longer than a year, where the APR reaches 100% or above, falls under the FCA's high-cost short-term credit rules, which cap its total cost: you will never repay more in interest and charges than the amount you borrowed.
When rates are high, borrowing less, or borrowing for a shorter time if you can afford the repayments, are the simplest ways to bring the total down. Our loans pages explain the amounts and terms available through Quick Loans.
APR Questions
Why can't you tell me my APR before I apply?
Because each lender prices your loan from your own details. A soft search lets lenders give you a personal price without affecting your credit score, and you can then decide whether to accept.
Is a lower APR always better?
Usually, when the loans are the same size and length. If they aren't, compare the total amount repayable as well, because a lower APR spread over a longer time can still cost more overall.
Does the APR change during my loan?
Most personal loans have a fixed rate, so your repayments stay the same from start to finish. Your loan agreement will always say whether the rate is fixed.