APR Explained  

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We appreciate that a four-digit APR number looks scary to say the least! But here we’ll explain exactly what the APR means.

The Annual Percentage Rate (APR) is an annualised calculation and is a common method of comparing money that is loaned over a period of at least 12 months. By law all credit providers have to display this figure.

However, Payday loans are set for a period of 31 days not a year so it’s not surprising the APR for a payday loans seems so high. In simple terms, the interest rate for a payday loan of 31 days is compounded several times over to generate the enormous APR.

Typically, when you borrow £100 for a period of 31 days, you will have to repay a total amount of £130 (the original £100 plus £30 in fees). Payday loans are meant to be short-term emergency loans, and you should not use a payday loan to borrow money for a term anywhere close to a year in length.

The bottom line: make sure you understand how much you will owe at each point in time (each month). Pay off your loan as quickly as you possibly can. At Uncle Buck, we want to make sure that you understand exactly how much your loan will cost. For more information on our charges please click here.

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