What does representative APR really mean?

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.
• Our representative APR is 49.5%, therefore over 51% of our customers paid an effective rate of 49.5% for their loan with the lender they chose.

• The representative example is a calculation of all the costs associated with an example loan using the representative APR for that product.
• To give you a fair indication of the monthly payment and total amount payable for the loan amount and term used.
• The representative example for guarantorloansuk.net is: If you borrow £4,000 over 36 months at a Representative rate of 49.5% APR and an annual interest rate of 49.50% (variable), you would pay 36 monthly instalments of £194.52. The total charge for credit will be £3,002.72 and the total amount payable £7,002.72.