2 min read
Estimates an annualised cost including fees so you can compare offers like-for-like. Illustrative, not a statutory APR.
What the headline typically leaves out
A headline rate usually excludes the arrangement fee, admin charges, and the effect of compounding. Each pushes the real cost above the advertised figure, sometimes substantially.
The two numbers that tell the truth
The APR folds compulsory fees into an annual rate; the total amount payable puts the whole cost in pounds. Between them they cut through any headline. If a lender will not give both, be wary.
A worked comparison
Loan A: 8% headline, £3,000 fee. Loan B: 9% headline, no fee. On £50,000 over three years, the fee can make Loan A the dearer deal despite the lower headline. Only the total repayable reveals it.
Surface the real number
Ask for the total repayable including every fee, or work it out. The calculator below shows the all-in cost so you compare on truth, not marketing.
Where Credicorp fits
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.
See headline rate and how to compare two loan offers on cost.
Frequently asked questions
Why is the headline rate misleading?
It is chosen to look attractive and usually excludes fees and compounding. The APR and total amount payable reveal the real cost.
Which number should I trust?
The total amount payable in pounds, or the APR. Both include the costs a headline rate leaves out.
Do all lenders quote a headline rate?
Most lead with one in marketing. A good lender will also give you the APR and total repayable on request — always ask.
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