APR Explained

APR is designed to make different credit offers easier to compare by showing the yearly cost with key charges included.

What to compare first

Start with the total amount you need, the repayment period, the monthly payment and all fees that can affect the final cost. A useful comparison uses the same loan amount and the same repayment period, because a lower monthly payment can sometimes hide a higher total cost.

Affordability matters

APR is helpful, but it should still be read together with monthly payment, repayment schedule and late payment rules. Leave room for regular bills, unexpected expenses and delayed income. If the repayment depends on taking another loan later, the risk is already too high and a smaller amount or a different solution should be considered.

Before you apply

Read the contract terms, late payment rules, early repayment options and any additional fees before submitting an application. Keep screenshots or notes from the comparison so that the final offer can be checked against what you expected.

If two loans have similar monthly payments, APR and total repayable amount can reveal the more expensive option.