What does APR mean?
Updated: Monday, 9 January 2023
What does APR mean? You might be asking yourself this question as you may have noticed the abbreviation APR everywhere on any financial lending website. Well, it stands for Annual Percentage Rate (APR) and is something that is extremely important to understand for any loan you may decide to have in your name.
So, what exactly does it mean? Here we’ll discuss all the different terms associated with APR and why exactly it affects you, so continue reading to find out more…
What does APR mean? You might be asking yourself this question as you may have noticed the abbreviation APR everywhere on any financial lending website. Well, it stands for Annual Percentage Rate (APR) and is something that is extremely important to understand for any loan you may decide to have in your name.
So, what exactly does it mean? Here we’ll discuss all the different terms associated with APR and why exactly it affects you, so continue reading to find out more…
What does APR stand for?
An Annual Percentage Rate (APR) is the total cost you pay to borrow the money for the year. APRs change per product, company and person, so it’s always important to seek this information out. The rate of your APR for car finance with us will firstly be decided by your current credit score. So, if you currently have bad credit that might be why you are paying a slightly higher APR on top of your original loan.
What does APR stand for?
An Annual Percentage Rate (APR) is the total cost you pay to borrow the money for the year. APRs change per product, company and person, so it’s always important to seek this information out. The rate of your APR for car finance with us will firstly be decided by your current credit score. So, if you currently have bad credit that might be why you are paying a slightly higher APR on top of your original loan.
What does representative APR mean?
A representative APR is often used by customers to compare lenders against each other. When a loan is advertised with a representative APR, it means that at least 51% of customers receive a rate that is the same as or lower than the representative APR.
Our current representative APR is 33.5%, but your loan for a car, van or motorbike could have an APR between 14.9% and 48.9%.
What does representative APR mean?
A representative APR is often used by customers to compare lenders against each other. When a loan is advertised with a representative APR, it means that at least 51% of customers receive a rate that is the same as or lower than the representative APR.
Our current representative APR is 33.5%, but your loan for a car, van or motorbike could have an APR between 14.9% and 48.9%.
How does APR work?
When you apply and we learn more about your circumstances, an APR is applied to your loan. This can be the same, lower or higher than the representative APR. It’s important to know that your APR may not be the same rate that someone else gets. This is due to your individual financial circumstances including your credit score.
When you use the car finance calculator on our website and put in all your relevant information, it will detail how much your monthly repayments could be, how much you will repay in total (which will include the APR), and what the APR will be based on how much you are wanting to borrow. It’s important to know that the calculator will only be able to give you an estimate, and that you will need to apply to be given an exact APR.
For example, if you borrowed £12,000 for a vehicle and you wanted to pay this back to us over 55 months with a ‘fair’ credit score. Your agreement would look something similar to the below:
Monthly payment: £401.96
Total to repay: £21,705.84
Calculated APR: 33.5%
(Correct as of the 9 January 2023)
How does APR work?
When you apply and we learn more about your circumstances, an APR is applied to your loan. This can be the same, lower or higher than the representative APR. It’s important to know that your APR may not be the same rate that someone else gets. This is due to your individual financial circumstances including your credit score.
When you use the car finance calculator on our website and put in all your relevant information, it will detail how much your monthly repayments could be, how much you will repay in total (which will include the APR), and what the APR will be based on how much you are wanting to borrow. It’s important to know that the calculator will only be able to give you an estimate, and that you will need to apply to be given an exact APR.
For example, if you borrowed £12,000 for a vehicle and you wanted to pay this back to us over 55 months with a ‘fair’ credit score. Your agreement would look something similar to the below:
Monthly payment: £401.96
Total to repay: £21,705.84
Calculated APR: 33.5%
(Correct as of the 9 January 2023)
Car finance APR calculator
There has been an error and we are unable to provide you with a quote. Please click here to continue with your application.
Car finance APR calculator
There has been an error and we are unable to provide you with a quote. Please click here to continue with your application.
How do I find out what my rate is?
We can only offer you an APR once you’ve applied and we have all the relevant details, but don’t worry your initial application will not affect your credit score.
You can apply here and one of our lovely team will be in touch with you shortly. Alternatively, you can give them a call on 0330 555 2505.
How do I find out what my rate is?
We can only offer you an APR once you’ve applied and we have all the relevant details, but don’t worry your initial application will not affect your credit score.
You can apply here and one of our lovely team will be in touch with you shortly. Alternatively, you can give them a call on 0330 555 2505.
What affects APR on a car loan?
Your APR will be affected by many things, but it doesn’t matter what sort of finance you are applying for, as what affects your APR will be the same for all types of finance, not just a car loan.
It is your credit score and credit history that will affect your APR on a car loan, and have the most impact. If you have a good credit history and credit score, then you are likely to get the representative APR and lower, but if you have a bad credit score and credit history then you are more likely to be offered a higher APR. This doesn’t mean that you can’t get finance, it just means that your APR might be higher and you could end up paying more for borrowing the money.
You can check to see if you have a good or bad credit score and what affects your credit score before applying, so that you have a good idea of what APR to expect. It might also be a good idea to try to improve your credit score so that when you apply for a car loan you have a better chance of getting offered the lower APR.
What affects APR on a car loan?
Your APR will be affected by many things, but it doesn’t matter what sort of finance you are applying for, as what affects your APR will be the same for all types of finance, not just a car loan.
It is your credit score and credit history that will affect your APR on a car loan, and have the most impact. If you have a good credit history and credit score, then you are likely to get the representative APR and lower, but if you have a bad credit score and credit history then you are more likely to be offered a higher APR. This doesn’t mean that you can’t get finance, it just means that your APR might be higher and you could end up paying more for borrowing the money.
You can check to see if you have a good or bad credit score and what affects your credit score before applying, so that you have a good idea of what APR to expect. It might also be a good idea to try to improve your credit score so that when you apply for a car loan you have a better chance of getting offered the lower APR.
For a better road ahead
Moneybarn is a member of the Finance and Leasing Association, the official trade organisation of the motor finance industry. The FLA promotes best practice in the motor finance industry for lending and leasing to consumers and businesses.
Moneybarn is the trading style of Moneybarn No. 1 Limited, a company registered in England and Wales with company number 04496573, and Moneybarn Limited, a company registered in England and Wales with company number 02766324. The registered address for these companies is: Athena House, Bedford Road, Petersfield, Hampshire, GU32 3LJ.
Moneybarn’s VAT registration number is 180 5559 52.
Moneybarn Limited is authorised and regulated by the Financial Conduct Authority (Financial Services reference No. 702781)
Moneybarn No. 1 Limited is authorised and regulated by the Financial Conduct Authority (Financial Services reference No. 702780)
