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Answer a straight question please Mr Loan Man!
Alison-J_2
Posts: 32 Forumite
in Loans
I dont get it...What is a flat rate of 4%?? Why cant Mr loan man tell me how much the apr is which is the bit I do understand. When I asked the apr he said, 'to give you an example of how low our rate is, the Bank of England rate is 4.5% and our flat rate is 4%' but i am still confused as to what the apr is on 4% flat rate. Please help me
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Comments
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APR is the total cost as a proportion of the loan including interest charged plus fees on a loan for £1500 for 1 year.
To me APR is actually more confusing as not all loans in their various forms can be gained in this form and so APRs can be distorted by annual fees for high value credit cards or for small/ short term loans.
It can be easily calculated yourself if you know the interest rate and all other associated fees.All posts made are simply my own opinions and are neither professional advice nor the opinions of my employers
No Advertising or Links in Signatures by Site Rules - MSE Forum Team 20 -
APR is about twice as much as the flat rate. See Personal Loans article:
See also http://www.whatsthecost.com/loan.aspxBe especially careful with car loans
Car dealerships often quote a ‘flat interest rate’ rather than the Annual Percentage Rate (APR) that banks use. This makes expensive loans look cheap. Double the flat rate to get a rough APR e.g. a 6% flat rate is 12% APR. Always compare loans based on the total amount you’ll repay (see Don’t Be A Flat Rate Fool).
For example, £10K, 8% APR, 5 years.
Total interest is £2165.84
Flat rate is 2165.84/5/10000=4.33%0
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