What is APR?

APR is an annualised percentage used to represent the cost of borrowing. It takes account of interest and certain charges, allowing different credit products to be compared on a broadly consistent basis.

Because APR is annualised, it doesn't mean that you'll borrow for a year or pay that percentage of the amount borrowed. Your actual cost will depend on factors including the amount borrowed, the repayment period and any applicable fees.

APR can help you compare different credit products.

For example, if two credit products have different APRs, looking at the APR can help you understand how their costs compare.

However, APR isn't necessarily the amount you'll actually pay when you use a product. Your actual cost depends on things like how much you borrow, how long you borrow for and any applicable fees.

That's why it's important to look at the total amount you'll repay, as well as the APR.

A Representative APR is the APR that's used to represent the cost of borrowing for a credit product. It takes account of interest and certain charges, allowing different credit products to be compared on a broadly consistent basis.

Because APR is annualised, it does not mean that you will borrow for a year or pay that percentage of the amount borrowed. Your actual cost will depend on factors including the amount borrowed, the repayment period and any applicable fees.

Zilch doesn't ever charge interest. However, fees may apply.

If fees apply, you'll see them before you confirm your purchase, along with your repayment schedule and total amount to repay.

APR isn't just about the interest rate. It's a standard way of representing the cost of credit and can take applicable fees into account.

So even when a Zilch payment option doesn't charge interest, a Representative APR can still be used to show the cost of credit in a standardised way.

For example, Zilch currently advertises a 14.9% Representative APR, based on a representative example of a £1000 spend with £11.50 in fees and a total repayment of £1,011.50 over 6 weeks or 3 months.

Your actual fees, payment options and eligibility may vary.

Not necessarily.

APR is useful for comparing credit products, but you should also look at the length of the agreement, the amount you're borrowing and the total amount you'll repay.

With Zilch, we'll show you the applicable fees, repayment schedule and total repayment amount before you confirm a purchase, so you can see exactly what you're agreeing to.