2 min read
Definition
An arrangement fee — a charge for setting up the loan, often 1–5% of the amount — is a compulsory cost, so it is included in the APR. A 10% loan with a 3% fee has an APR above 10%. Where the fee is deducted from the advance, it costs even more, because you pay interest on money you never received.
In plain terms
The fee is not separate from the cost of borrowing — it is baked into the true annual rate, which is why comparing on APR beats comparing on the interest rate alone.
Why it matters for your company
Always compare on APR or total repayable so arrangement fees are in the picture. See arrangement fee and use the true cost of borrowing calculator.
Credicorp lends to your company, not to you personally, and takes no personal guarantee. See indicative terms on business loans, or apply online in minutes.
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Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.