Annual Percentage Rate (APR)
The Annual Percentage Rate (APR) is the yearly cost of borrowing shown as a percentage, including interest and most compulsory fees. It is designed to let borrowers compare credit products on a like-for-like basis. UK regulated lenders must show a representative APR in advertising.
APR spreads interest and fees across the life of the loan using a standard formula, so a loan with a low headline rate but high fees can have a higher APR than it first appears. 'Representative APR' is the rate at least 51% of accepted customers get.
APR is about cost of credit, not affordability; a loan can be cheap and still unaffordable.
Credit Canary builds annual percentage rate into one platform for UK lenders, with the data and decisioning behind it.
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