APR rate doesn't add up

Ascheapaschips

Hi,

My wife and I recently applied for a loan and were approved at APR 3.2%.

We got the paperwork through but the figures don't add up to us! We were expecting interest to be £400 odd (based on 3.2 markup) but the interest being applied is quoted as £1,100 on the paperwork and is above 8.1% based on my calculations.

Am I missing some technicality applied to loans? There are no "hidden extras" from what I can see. Nothing like payment protection or the likes.

Any advice would be appreciated.

Many thanks.

[Deleted User]

What are the figures on the agreement? Amount, term, rare etc.

Ascheapaschips

Thanks zx81 but I think I've got it now. It's a 60 month loan and it's how it spreads out year on year.

jonesMUFCforever

I wonder id the OP worked out the interest for one year not the term of the loan.

Caz3121

Ascheapaschips wrote: »

Thanks zx81 but I think I've got it now. It's a 60 month loan and it's how it spreads out year on year.

that will be it
a £12.5k loan over 12 months @ 3.2% would cost £400 in interest
a £12.5k loan over 60 months @ 3.2% would cost £1,043.20 in interest