Understanding Representative APR%

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What does APR stand for?


Before borrowing a short term loan, it is critical to understand the meaning of your APR rate. The APR rate will determine how much the interest on your loan will cost. By comparing APR rates, you are better equipped to choose an affordable loan provider.

Use our loan calculator to work out your repayment on your next instalment loan.

To start with, what exactly is APR and what does it mean with regard to short term loans? The APR percentage is a number advertised by lenders enabling borrowers to easily compare similar financial products. APR represents the annual rate for borrowing or earned through investments and includes transaction fees. APR does not account for compounding interest, and at Moneyboat we do not compound our interest.


On a loan, APR can either be variable or fixed. Variable APR is unpredictable because it can vary from month to month, affecting your payment. Moneyboat offers clients a fixed APR rate so you can understand and budget for your loan payments without unexpected curveballs.


An APR can be calculated by multiplying a monthly percentage by 12. If a loan charges 17% a month, the APR will be 204%.


The APR is calculated using a number of factors, including the amount of your loan, the schedule of your loan payments, and any extra late charges that may be added to the total loan repayment.


Instalment loan charges and APR


In addition to publishing our APR, we make things clear for customers by providing a detailed breakdown of your repayment schedule. This includes the dates of repayment, amount borrowed, and interest repayment amounts, and duration between payments. In addition to the APR, we display this

breakdown of repayments on both the pre-contract information sheet that we provide as well as the loan agreement and our funding confirmation email.

The following equation is used to calculate the APR for each loan where the left hand side represents amount borrowed and the right represents repayments.

The table below shows an example of what we’d charge you on a £400 loan to be repaid over a 4 month period in 4 instalments. The table below includes the following interest:

  • 0.7% – the daily rate of interest charged, which is LESS than the 0.8% CAP the Financial Conduct Authority has introduced


The table below shows an example of what we’d charge you on a £400.00 loan to be repaid over 113 days or 4 months (4 instalments). The table below includes the following interest:

  • 0.7% – the daily rate of interest charged, which is LESS than the 0.8% CAP the Financial Conduct Authority has introduced
Amount borrowedLength of timeTotal to repay  Capital PaidInterest PaidCapital Balance Remaining
£400.0021 days£149.37£90.57£58.80£309.43
30 days£149.37£84.39£64.98£225.04
29 days£149.37£103.69£45.68£121.35
33 days£149.37£121.35£28.02£0.00
Total: £400.00113 days£597.48£400.00£197.48

Taking into account all the interest and the charges listed above the loan carries a Representative 939.5 % APR.


Remember, the above example is over 113 days; the interest charge for credit is 0.7% per day so will change depending on the number of days the loan is taken out for. Should you require more information or a further explanation please contact us via phone or email.

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Short Term Loans

Part of Evergreen Finance London Limited, MoneyBoat UK is a transparent and flexible short term and payday loans direct lender.

We offer loans of anything between £200 – £1500 for a minimum of 10 days to a maximum of 6 months. When you take out a loan with Moneyboat, all of your repayments are clearly set out and simple to understand.

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