APR explained
What the APR includes and why it is the most important figure when comparing a loan.
When you compare loans, two percentages come up quickly: the borrowing rate and the APR. For an honest comparison the second one matters most, because it sums up the total annual cost of a loan in a single value.
What the APR includes
The APR reflects not only the interest but also other cost-relevant factors, such as how repayments are structured and spread over time. That makes it a more reliable benchmark when two offers sit side by side.
Why it makes comparison fair
Two loans can share the same borrowing rate and still cost different amounts. The APR reveals those differences. Always look at this figure in an offer, not just the advertised rate.
How to use it in practice
Use our calculator to see the monthly payment and total cost. Then compare offers by their APR – and read the pre-contractual information before you decide.
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