What is APR?

If you’re shopping around for lending, one of the things you should look to compare is the APR, or Annual Percentage Rate. This is one factor that will always have a huge impact on the value and usefulness of any lending, however you should also check thoroughly the other aspects of any borrowing before committing to it.

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12 Months

The APR tells you the amount of interest that you’ll pay over a period of twelve months, rather than giving you a rate for your monthly payments. The APR therefore gives you a better indication of the costs of paying the loan back.


When comparing loans online, you’ll typically see the APR as one of the main factors in any comparison.


Essentially, the APR for a loan lets you work out how much you’ll be paying back on top of the actual loan amount itself. A good loan deal is one in which you pay back the minimum amount of interest, and therefore the lower the APR the better the deal in general.

However, APR isn’t everything, and there are a number of other elements in any loan or mortgage that you should check out, such as minimum terms, penalties for paying the lending off early etc. Make sure you understand these before agreeing to a loan as unexpected costs can come as a nasty shock.


When you’re shopping around for a loan, mortgage or indeed remortgage, you should try as far as possible to compare your alternative options so that you choose one that’s best for you.


For this reason, it’s advisable to make the best use of online resources such as mortgage and remortgage calculators. You feed into these the details of your potential mortgage or remortgage, including the APR, and then get a reasonably good idea of what your monthly bills will be in the short and long term, as well as the length of time you’re likely to be repaying the debt.

If you compare any potential deal to other options, as well as to your current situation as it stands, it can give you a far better idea which loan or mortgage deal to go for, or indeed whether to go for one at all.

As with any lending, you should really only embark on it if you have good reason to think that it’ll improve your financial situation and therefore your life.