APR vs Flat Rate Calculator

"5% flat" is not 5%. Convert dealer flat rates into real APRs, see the true cost in pounds, and compare like with like.

True APR
0%
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Monthly Payment
£0
Total Interest
£0
Total Repaid
£0
Rate Multiplier
×0
Same Loan at a 6.9% APR Bank Loan
£0
Possible Saving
£0
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Flat Rate → True APR · Quick Reference (48-Month Term)
Quoted Flat RateTrue APR
Interest Accrual · Flat vs Reducing Balance

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APR vs Flat Rate FAQs

What is the difference between flat rate and APR?
A flat rate charges interest on the ORIGINAL loan for the whole term, ignoring your repayments. APR charges interest only on what you still owe. Since your average balance is roughly half the original amount, a flat rate is close to half the equivalent APR: 5% flat ≈ 9.5% APR on a typical car finance term.
Why do car dealers quote flat rates?
Because they look half the price. "4.9% flat" sounds far better than the ~9.4% APR it actually is. UK rules force the true APR into the paperwork · so read the agreement's APR line, ignore the rate spoken across the desk, and compare against a personal loan APR before signing anything.
What does representative APR mean?
Only 51% of accepted applicants need to receive the advertised rate · your offer can be far higher depending on your credit profile. The rate YOU are offered is in the pre-contract information (SECCI). Judge the deal on that document, never the advert.
Is 0% APR really free?
The finance is, but the cost often hides in the price: 0% car deals frequently give up the discount or deposit contribution a cash buyer would negotiate. Compare the TOTAL you pay under each route · a 9% APR loan on a heavily discounted price regularly beats 0% on full sticker.
What is APRC on mortgages?
Annual Percentage Rate of Charge · the mortgage version of APR, including fees, computed over the whole term assuming you fall onto the standard variable rate after the fix. Useful for total-cost comparison; misleading if you remortgage at each fix end like most borrowers do.

For informational purposes only · Not financial advice · APR computed from payment schedule via standard amortisation · Bank loan comparison uses 6.9% APR as an illustrative market rate · Always read the SECCI pre-contract document for your actual APR