Search Results for: APR

APRC stands for Annual Percentage Rate of Charge. It shows how much it will cost you to borrow money over the term of your mortgage, taking into account any additional fees or charges. APRC also takes into account that your lender may offer you a lower interest rate for the first few years. It is then expressed as a percentage so you can easily compare your different mortgage options.

APRC vs APR

APRC is different from what an APR is specifically, so it is important to note the differences. You can also find out how your APRC is decided.

The APR you are offered depends on both the credit card you are eligible for and your credit score. Some credit cards will have a set APR. Others may have a range of APRs which vary depending on your credit score and personal circumstances. In this instance, the better your credit score, the lower the APR you are likely to be offered. For more information, we have written a full guide on Annual Percentage Rates explained. You might also like to know what an APR stands for.

This stands for Annual Percentage Rate – which is the cost of borrowing money over the course of a year. Having it as a percentage figure allows people to compare the cost they’ll face when taking out a loan or credit card. It is important to note that an APR is different from an APRC.

Lenders also use something called ‘Representative APR’. This is the APR that 51% or more of successful applicants will get. But that rate may not be available to the other 49% of applicants, who are likely to be offered a higher rate.

This is why it’s so important to pay attention to the APR% when checking your eligibility, as it gives you a good idea of just how much you will be paying each year for borrowing money from lenders. For more advice, take a look at our article on explaining Annual Percentage Rates. You might also like to know how your APR is decided or what is Representative APR %?

Typical APR % (Annual Percentage Rate) is used by lenders so you can easily compare rates when you check your eligibility for a loan. Lenders use the term to describe the amount of interest you’ll pay annually on money you want to borrow. Typical APR %must reflect at least 66% of secured loan business expected to result from advertising the rate. For more advice and guides, including what APRC is, take a look at our other Mortgage FAQs.

Yes, it is possible to get a homeowner loan with bad credit. This is because lenders secure the loan will against your home, adding an extra layer of security for the lender.

With a homeowner loan, you can borrow from £10,000 to £500,000+ and spread the cost over 1 to 30 years.

Bad credit homeowner loan considerations

That said, you should think carefully before securing finance against your home. If you are unable to repay your loan, as a last resort your lender could repossess your property to recover their funds. To be eligible for a homeowner loan, you’ll need to be a homeowner with equity in your home.

Warning: Late repayment can cause you serious money problems. For help go to moneyhelper.org.uk.

Second-charge mortgages 14.26% APRC Representative (variable). Representative example (if you choose to add fees to the loan): assumed borrowing of £25,000 over 7 years, plus a broker fee of £2,850 and lender fee of £367.50 would result in monthly repayments of £509.96, the borrowing rate is 12.78%, the APRC is 14.26% (variable), total charge for credit would be £14,619.14 and the total amount payable would be £42,836.64. Aro is a credit broker and not a lender. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

If you would like to learn about what gives you a bad credit score, check out our blogs, guides and FAQs.

This very much depends on your individual circumstances. When it comes to personal loans, lenders will look at your credit score to decide whether to offer you a loan and determine your interest rate. Generally if you have bad credit, you will be charged a higher interest rate.

If a personal loan isn’t an option for you, you may still be able to consider:

• Guarantor loans
• Homeowner loans
• Credit builder cards

Although your credit history does play a big part in your eligibility for finance, there are other factors that a lender will consider, such as your income, expenses, the size of the loan you are looking for, how much debt you already have and your homeowner status.

Warning: Late repayment can cause you serious money problems. For help go to moneyhelper.org.uk

36.8% APR Representative (fixed)

Representative example: 36.8% APR Representative based on a loan of £12,500 repayable over 48 months at an interest rate of 36.8% pa (fixed). Monthly repayment of £500.83. Total amount repayable is £24,039.67.

Like with most loans, debt consolidation loans can be categorised into two different categories. These are secured and unsecured loans.

Secured debt consolidation loans are loans where the amount you borrow is secured against the value of an asset that you own, usually your home. This means that, by taking out the loan, you are acknowledging that if you miss the repayments, your home or asset may be at risk.

Unsecured debt consolidation loans, on the other hand, do not require an asset to be secured against.

When searching for a debt consolidation loan, don’t be tempted to borrow more than you need. Any amount you borrow will still need to be repaid. When checking your eligibility for a debt consolidation loan, it is worth keeping a few things in mind:

• Although you’re reducing the number of debts to a single debt, you could be increasing the term of the loan.
  
• You may benefit from lower monthly repayments – but the total amount repayable may be higher overall.
  
• Be sure to compare the interest rate or APR (annual percentage rate) of your existing debts with the interest rates of the debt consolidation loan. This will help you ensure that you benefit from consolidating your debts.
  

We do get asked “why debt consolidation” a lot. Simply put, if you have multiple debts (loans, credit cards, overdraft, etc.) and are struggling to repay them all each month, then consolidating those debts into one payment could make managing your finances a little easier for you.

A debt consolidation loan groups all your different debts together. This could mean:

• Monthly repayments are easier to manage;
• You spend less time sorting out all your different repayments;
• It’s simpler to budget;
• You may be able to reduce overall monthly repayments;
• You could save money by switching to a loan with a lower APR;
• You could reduce your monthly repayments by spreading them out over a longer term (although this may increase the amount of interest you pay back overall);
• You could reduce the term of your debt and save money on interest.

Why debt consolidation can work

Like with most loans, if you don’t keep up with repayments throughout the term of your contract, then it can negatively affect your credit score. That being said, with just one monthly repayment to remember, you may find it easier to stay on top of your finances.

Regularly repaying a debt consolidation loan (on time) could help improve your credit score in time.  ​​​

So, what is a debt consolidation loan? A debt consolidation loan can be used to pay off multiple loans, credit cards, store cards or overdrafts so that each month you just make one single monthly repayment to a single lender. This simplifies the debt, keeping it all in one place and potentially making it easier to manage.

You could also use a debt consolidation loan to pay off just one credit product (e.g. a single personal loan or credit card) that has a higher APR. If you’ve been consistently making repayments for a while, your credit score may have improved since you first took out your current credit products. This means you might now be eligible for a better rate and able to reduce the amount of interest you’re paying by switching to a debt consolidation loan with a lower APR.

If you’re thinking of consolidating your loans, credit and store cards into one, you should know that it might mean extending the term (that’s the length in months) of your debt, as well as increasing the total amount you repay.

Your mortgage rate (or APRC) is how much you’ll see in charges to borrow money over the term of your mortgage. This also includes any additional fees or charges. As a result of all this, you’ll see the expression of this as a percentage. This is in order to help you easily compare different mortgages.

How to calculate a mortgage rate

There are many factors that can influence your mortgage rate. But two that you can have an impact are your credit score and the size of your deposit. A good credit score and a bigger deposit can give you a lower APRC. In turn, that means cheaper monthly payments. That’s how to calculate a mortgage rate.

A cash advance is a service provided by most credit card companies. In short, it allows you to withdraw cash from an ATM or at your bank using your credit card. Your cash advance limit may be different to your card’s credit limit. Consequently, the APR they charge you with may be different to your card’s usual APR. You’ll face charges on interest for a cash advance from the moment you borrow the money to until you repay it.

The rate or APR you’re offered by lenders on a loan will be based on both your credit history and personal circumstances.

At Aro, we precisely assess all of your borrowing needs. Then, we use your data to match you with the best products for you and your finances. We also clearly indicate when a rate is real (guaranteed) or representative (advertised).

This means you’re clear on what rate you can expect before you proceed with a lender.

Not clear on the difference between real and representative rates? Our guide to real rates explains all.

Whether or not you can get a loan with a low credit score depends on your personal circumstances and the finance options available to you. For instance, if you’re a homeowner, you may have more borrowing opportunities available.

As lenders may consider you more of a risk to lend to if you have a lower credit score, it’s likely that you’ll be offered a higher APR, or you may not receive a borrowing option at all.

If you have a low credit score because you’ve not borrowed money in the past but have a high amount of disposable income, you may want to consider using Open Banking to show to a lender that you can afford to take out the money you want to borrow.

You can also use our online eligibility checker to find out what options are available to you before applying for any finance. Our eligibility check won’t affect your credit score. From there, you can decide if you want to take steps to try to improve your credit score before choosing a lender, as this may improve the APRs and options available to you.

Warning: Late repayment can cause you serious money problems. For help go to moneyhelper.org.uk

36.8% APR Representative (fixed)

Representative example: 36.8% APR Representative based on a loan of £12,500 repayable over 48 months at an interest rate of 36.8% pa (fixed). Monthly repayment of £500.83. Total amount repayable is £24,039.67.

So, what gives you a bad credit score? Well, when it comes to credit scores, everyone has to start somewhere. Although there are lots of different factors that can lower your credit score, there are a few main causes that can lead to bad credit:

• Missed or late payments on your credit file
• Little or no credit history
• CCJs or defaults
• Bankruptcy

While those are the big hitters, there are a few other factors that can have an impact:

• Not being registered on the electoral roll
• Having a high credit utilisation ratio
• A hard credit search being recorded on your credit file
• A declined credit application
• Having a high amount of debt

The good news is, anybody can improve their credit score over time. If you need a few tips on how you can give yours a boost, read our guide to improving your credit score.

Warning: Late repayment can cause you serious money problems. For help go to moneyhelper.org.uk

36.8% APR Representative (fixed)

Representative example: 36.8% APR Representative based on a loan of £12,500 repayable over 48 months at an interest rate of 36.8% pa (fixed). Monthly repayment of £500.83. Total amount repayable is £24,039.67.