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What do our APRC rates mean?
Secured loans and APRCs can be confusing at the best of times. With various loans on offer at various rates, it’s not always immediately obvious which type of loan suits your particular needs and offers the best value for money.
By understanding APRCs, you will be more informed to compare secured loan options to identify the best deal available and find a suitable loan for you.
What is APRC?
APRC stands for Annual Percentage Rate of Charge.
It is shown as a percentage and is the annual cost of a secured loan or mortgage. It includes all charges (such as fees and other costs), calculated as if you kept your secured loan or mortgage for the full term without changing it and allows you to see costs upfront.
It is used to compare mortgages and homeowner loans – the types of loan that are secured against your house.
As some mortgages can offer a lower rate of interest for the first few years, the way the APRC is calculated reflects this, whereas APR uses just one rate for one year.
APRC is designed to help show you the impact that the different rates and any charges could have over the lifetime of the mortgage or loan, which will help you to compare alternative options.
What is a representative APRC?
Representative or typical APRC refers to the rate at least 51% of people who are accepted for that product will pay or lower. Meaning up to 49% of people who take out that product may pay a higher APRC than that advertised.
For secured loans this Representative APRC may well depend on the amount borrowed and term. Remember to check the Representative APRC when comparing products.
When a lender accepts you for a mortgage or secured loan make sure that you always double-check the actual APRC that you are being charged, as this could be different from the representative APRC. The rate of interest on some forms of borrowing is decided on with reference to your financial status and credit history.
How is APRC calculated?
It takes into account the initial rate, all fees and charges and future rates, it then calculates a percentage which tells you how much the mortgage would cost you each year if you were to stay with the same product until it is repaid.
Homeowner loan rates are calculated using a combination of factors that are specific to the individual, which includes loan amount, loan term, house value and their credit history.
These factors will be assessed during the initial application stage to check the affordability and the total cost of the loan.
At Evolution Money we believe it’s important to consider a person’s entire financial situation before making a decision on a loan.
For a typical loan of £30,000.00 over 120 months with a variable interest rate of 19.56% per annum, your monthly repayments would be £598.34.
Including a Product Fee of £2,400.00 (8% of the loan amount) and a Lending Fee of £807.00, the total amount repayable is £71,800.20.
Annual Interest Rates ranging from 11.88% to 29.38% (variable). Maximum 50.00% APRC. The loan must be paid back by your 70th birthday. Read more.
Think carefully before securing debts against your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured against it. If you are thinking of consolidating existing borrowing, you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.
