Loan Quote Check

Superhoopza

I've had a quote for a loan from Santander of £8,000, no arrangement fees, at 19.9% APR over 3 years, quote me total interest of £2,453 and therefore a total repayment of £10,453.

I've plugged these same terms into about 10 different loan calculators who all come out with an expected interest of £2,688 so total repayment of £10,688.

Why is the Santander quote cheaper? Seems I'm missing something obvious. The more expensive loan presumes I start to pay back from the first month.

DullGreyGuy

Thats exactly what the MoneySupermarket calculator gives... https://www.moneysupermarket.com/loans/calculator/ 

Most deviations are caused by the fact you are quoting APR and they are asking for another form of interest rate

Superhoopza

Yeah that makes sense, thank you.

ogzemn

I think the difference likely stems not from the loan itself, but from how the calculators determine the repayment schedule.

Small details such as when the first payment is due, how interest is calculated, and how payment amounts are rounded can alter the total figure.

When comparing loan offers, I believe it is more useful to examine the total repayment amount over the life of the loan rather than focusing solely on the APR or the monthly installment.

I found this explanation of the loan repayment process helpful:

https://kredaqro.com/kredit-odenisi/

Of course, the actual figures always depend on the lender's calculation method, but understanding the logic behind the repayment makes it easier to compare different offers.