Help me understand APR & loan rates

DebtMan_2

Ok, here's the thing.

My partner has an ongoing loan with Cahoot which she took out about 3 years ago. Initially the APR was good at about 7.9%.

The APR is now 15.9%. Her balance is itro £3700, so with her monthly payment, it'll take another 36 months to pay off.

We wondered about whether or not she should take out another loan with a lower rate and pay it off that way. So moneyback bank will give her £3700 with an APR of 8.9% and monthly repayments of £117 x 36 months = £4212.

Neither of us understands the difference. If the APR is lower, why aren't the monthly payments lower?

In laymans terms please, I'm no accountant.

Thanks

DM

CLAPTON

what are her monthly payments?
how do you know it will take 36 payments to repay the debt?

standupguy

If the APR on the cahoot loan has increased then it must be a variable interest type of loan rather than a fixed loan with monthly payments fixed for the term of the agreement?

If this is the case then your estimate of the outstandings may be just the capital outstanding with interest added in addition monthly as you go?

If the APR is lower then the payments are always lower as the amount of interest charged is less