Representative APR is not what it seems!

What is APR?

APR (Annual Percentage Rate) is the annual interest rate charged on the money you borrow. It is calculated per year and split over 12 months. It forms part of your monthly repayments and is often referred to simply as ‘interest’.  APR is a quick way to compare various loan products … but there are other factors such as penalties that may indicate that the product is not right for you.

What is Representative APR?

Many financial organisations advertise their interest rates for loans using the term ‘representative APR’. This shows the cheapest available loan rate, also known as the ‘headline rate’. Firms are allowed to advertise a representative APR if they reasonably expect 51% of applicants will receive the headline rate. The remaining applicants (approximately 49% of them) could be charged a higher interest rate, usually after reviewing your credit file and application.  In these circumstances you may not know what you will be charged until the later stages of the application.

Churches Mutual

We don’t believe that advertising our products using Representative APR is fair, so we don’t do it. With our loans, the rate you see is the rate every member gets if accepted, regardless of credit score. All our loans are individually assessed on affordability and subject to status and our lending criteria.