Working out APR

bishblaize

Hi,

My wife has a graduate overdraft after finishing uni last year. We have a bit of money to pay off either this or put towards our car loan. The car loan is at £5500@ 9.1%, but when my wife spoke to the bank about the APR for her overdraft they said it was fees only, and varied depending on the amount in the bank account at the time.

Best case scenario was £7.55 a month, worst case was £11.05 a month. The total sum is £1600 and generally stays at its limit.

Since I cant fathom what APR this translates to, or whether it can be thought of in those terms, I dont know which debt we should put our money towards.

Any advice welcome

Yours

Bish

ironlady2022

I think this is the sum you were after

Best case scenario: £7.55 x 12 months = £90.60

(£90.60 / £1600) x 100 = 5.66% APR

Worst case scenario: £9.05 x 12 months = £132.60

(£132.60 / £1600) x 100 = 8.29% APR

That is relatively cheap for an overdraft. Only way you will save is to apply for a 'super balance transfer' credit card whereby money is put into your account for you to allocate payments (this would not apply as it would automatically pay your overdraft). It's different from your normal balance transfer as that is credit card to credit card. Hope this helps.