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What's an APR?
The Annual Percentage Rate (APR) allows you to compare the complete cost of borrowing of one loan against another - using the example below the lower the APR the lower the cost of borrowing.
| Lender A | Lender B | |
|---|---|---|
| Balance Financed |
£5,000 |
£5,000 |
| 24 Monthly Rentals |
£250 |
£240 |
| Upfront Fee Payable |
N/A |
£300 |
| Total Amount Payable |
£6,000 |
£6,060 |
| APR %* |
19.7% |
22.2% |
* APRs quoted are for illustration only and do not reflect current rates.
Assuming you were borrowing £5,000 over 2 years with monthly payments of £250, the APR would be 19.7%.
Lender B may make payments available at £240 (£10 per month cheaper), but the customer is charged a set up fee of £300 with the first payment.
The second lender has lower monthly payments, but because of the effect of paying £300 so early in the agreement, it affects your cashflow and therefore the true cost of borrowing is higher than Lender A, hence the higher APR.
Terms and conditions apply. Finance subject to status. Guarantees / indemnities may be required. Applicants must be 18 or over. Hyundai Car Financial Services RH1 1SR.