APR Explained | MoneyBoat.co.uk | UK Direct lenders
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Are you asking yourself what APR stands for? Learn all about APR in this informative article “APR explained” from your British direct lender, Moneyboat.co.uk. We offer short term, payday loans with an industry low APR for up to £1500 for returning customers or £800 for newbies. Our loans are flexible and we may have a loan for bad credit applicants too. The decision is swift with same day funding available.


APR Explained – Understanding Representative Percentage


In no uncertain terms, the first thing to know about APR is that understanding it can help you save money. Technical jargon including APR terminology is sprinkled generously around loan comparison and direct lender sites. But how is APR explained? Let’s delve into this term and make sure you can use it to your advantage.


Put very simply, APR is a comparative measure to help understand the pro’s and con’s of different loans. But this knowledge alone is not enough to really use APR when deciding which loan to take. What type of pro’s and con’s should you look for and what even is the formula for APR calculations?

Before borrowing a short term loan, take very careful consideration to ensure you are borrowing responsibly and in an affordable manner. The APR explained percentage is a number advertised by lenders enabling borrowers to easily compare similar financial products.

APR explained alone can be somewhat confusing. This is because it is does not directly reveal the actual interest that you will be charged on your loan. Its primary purpose is to give you a quick way to compare similar products. Equally, if not more, important though, is making sure that you are aware of and understand the actual interest and charges associated with a loan product and being sure that the repayments are affordable for you.

The APR is calculated using a number of factors. This includes the amount you borrow, length of time you borrow for, how frequently you make your payments and how much they are for. Any extra charges that may be added into the total loan repayment are taken into account as well.

Instalment and short term loan charges and APR


In addition to publishing our APR, we endeavour to clearly communicate the exact amount that borrowing a loan from MoneyBoat will cost. We do this by providing a detailed break down of your repayment schedule. This includes the dates of repayment, principle and interest repayment amounts, the duration of time interest has occurred for each repayment and the totals. In addition to the APR, we display this breakdown of repayments on both the pre-contract information sheet, your loan agreement and our funding confirmation email.

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


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 borrowed Length of time Total to repay   Capital Paid Interest Paid Capital Balance Remaining
£400.00 21 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: £400.00 113 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.

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

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. Details at the foot of the page.

Representative 939.5% APR

Representative Example:

  • £400 loan for 113 days.
       (4 instalments)
  • Total: £597.48
  • Interest £197.48
  • Interest rate 255.5% pa (fixed)
  • Repay £149.37 over 4 payments
  • Representative 939.5% APR

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