At a Glance
- The tool shows total interest and monthly repayments for nine APR bands from 6% to 30%, across 3, 5, and 7-year terms – how this tool works
- Set your own APR and a benchmark rate to see the exact pound difference between what you are being offered and a lower rate – understanding the premium figure
- Representative APR means at least 51% of accepted applicants receive the advertised rate; others may be offered higher – representative APR explained
- A longer term reduces monthly payments but increases total interest at every APR – the gap between high and low rates widens with term length – how term length affects the cost gap
- All figures are illustrative examples only – not a quote, offer, or guarantee – about this tool
Apr Band Cost Comparator
APR band cost comparator
See what your APR costs in real money – and how much extra you pay at each step up the rate ladder. All figures are illustrative examples only.
Illustrative mainstream secured rate – adjust to match a comparison product
Total interest by APR band (5-year term) – your rate highlighted
Figures are illustrative only. APR is used for the repayment calculation using standard UK amortisation. The benchmark APR is an illustrative mainstream secured loan rate – actual rates depend on credit profile, LTV, lender, and market conditions. Representative APR means at least 51% of accepted applicants receive the advertised rate – others may be offered higher. This tool does not constitute financial advice.
About this tool
APR is the number lenders are required to advertise, but it is rarely explained as an actual amount of money. A 22% APR on a £15,000 loan over five years does not feel like a real number until you see that it costs over £9,000 in interest. This tool converts APR into pounds, across nine bands and three term lengths, so you can see the genuine cost of different rate levels before you apply.
The benchmark slider is there to put the cost in context. If you can find a product at 10% APR and you are being quoted 22%, the tool shows you precisely what that difference is worth over the life of the loan at your chosen term. That figure is not a reason to avoid borrowing, but it is a useful input when deciding whether the purpose of the borrowing justifies the cost, or whether it is worth spending more time improving your credit profile before applying. Our guide to the role of interest rates in bad credit loans covers the mechanics in more detail.
What it does
Calculates total interest and monthly repayments at nine standard APR bands using the UK amortisation formula, across 3, 5, and 7-year terms. Shows your chosen APR highlighted against a benchmark, and quantifies the interest premium you pay above the benchmark across every term length.
What it does not do
The tool does not run a credit check, access any credit reference agency, or produce a quote. It does not account for arrangement fees, early repayment charges, or other product costs beyond the interest calculation. It cannot tell you what rate you would actually be offered by any lender.
When to use it
Use it before applying, to understand the real cost of a rate you have been quoted. Use the benchmark slider to model what a lower rate would save, which helps you decide whether to shop around further or whether improving your credit profile before applying is worth the wait. Use it alongside our loan calculator to build a fuller picture.
How the APR bands are set
The nine bands (6%, 8%, 10%, 12%, 15%, 18%, 22%, 26%, 30%) span the typical range from prime secured lending through to high-rate unsecured and adverse credit products. The lower bands represent rates accessible to clean credit profiles. The higher bands represent rates commonly seen on bad credit loans and high-risk unsecured lending.
How this tool works
The tool uses three adjustable inputs to generate an interest cost comparison across nine APR bands and three term lengths. The calculation uses the standard UK amortisation formula, which is the same method lenders use to calculate monthly repayments on personal and secured loans.
Set your loan amount
The slider runs from £2,000 to £50,000. All figures in the chart, premium banner, and comparison table update immediately when you move it. The default is £15,000, which sits in the mid-range for bad credit personal and secured loans. Set it to the amount you are actually considering borrowing to get the most useful output.
Set your APR
Enter the APR you have been quoted, or the representative APR of a product you are considering. The tool highlights your rate on the chart and in the comparison table, and calculates the premium above the benchmark across all three term lengths. If your APR falls between the standard bands, the tool shows it as an additional row in the table.
Set the benchmark APR
The benchmark is an illustrative rate to compare against. The default is 7%, representing a broadly mainstream secured loan rate. You can adjust it to match any other product you are comparing: a different lender’s rate, a rate you might qualify for after improving your credit profile, or a rate a family member or colleague has been offered on a similar amount.
Read the premium figure
The premium banner shows the additional interest cost of your APR versus the benchmark on the 5-year term, expressed as a total pound amount and as a multiplier. The tiles below it show the same premium across the 3 and 7-year terms. The comparison table gives the full breakdown for every band and every term, with your rate and the benchmark highlighted.
What the APR bands represent
The nine bands in the tool are not arbitrary. They map broadly to the rate landscape you would encounter across different product types and credit profiles in the UK lending market. Understanding which band is typical for your situation helps set realistic expectations before you apply.
6% to 10%
Typically associated with prime secured loans and remortgages for borrowers with clean credit profiles, strong income evidence, and meaningful equity in their property. Also seen on some low-LTV second charge mortgages arranged through brokers with access to competitive specialist lenders. Not generally accessible to applicants with recent adverse credit history.
12% to 15%
The mid-range for near-prime secured lending and competitive unsecured personal loans for clean or near-clean profiles. Some building societies and specialist lenders operate in this band for applicants with minor or historical adverse entries. Also common for competitive unsecured borrowing via challenger banks and credit unions for borrowers with strong credit records.
18% to 22%
Common territory for adverse credit secured and unsecured products, particularly for borrowers with one or more defaults, CCJs, or a thin credit history. Many representative APRs advertised by bad credit personal loan providers fall in this range. The rates within this band can vary significantly based on loan size, term, and the specific lender’s risk appetite at the time of application.
26% to 30%
High-rate territory, typically seen on unsecured bad credit products for borrowers with serious adverse history, or on short-term lending products. At these rates the total interest cost over five or more years is substantial. Borrowers in this band are often better served by a secured product if they have sufficient equity, or by waiting and improving their credit profile before applying.
These descriptions are illustrative. Actual rates vary by lender, product type, loan amount, term, and market conditions. The rates any individual is offered depend on their specific credit profile, affordability assessment, and the lender’s current criteria. Our guide to whether bad credit loans are a good idea covers how to weigh rate levels against borrowing purpose in more detail.
Representative APR: what it means in practice
When a lender advertises an APR, they are required by FCA rules to display the representative APR. This is the rate at which at least 51% of accepted applicants are offered the loan. The remaining 49% may be offered a higher rate, based on their individual credit profile, income, and other factors. The rate you see advertised is a floor for the majority, not a guarantee for everyone.
This matters when using the tool. If you enter the representative APR from an advertisement, the actual rate you are offered after a full application may be higher. Using the tool to model a rate two or three percentage points above the advertised rate gives a more conservative picture of what you might pay. Our guide to what bad credit loans are explains the representative APR rule in more detail, including how to use soft-search eligibility tools to get a personalised rate indication before a formal application.
How term length interacts with APR
The relationship between APR and term length is not linear. At a low APR, extending from 3 years to 7 years increases total interest significantly but the gap in pounds is relatively contained. At a high APR, the same extension produces a much larger absolute increase in interest, because the higher rate compounds over a longer period. The premium tiles in the tool show this effect: the extra cost of your rate versus the benchmark grows with the term.
This has a practical implication. Borrowers at high APRs who choose longer terms to reduce monthly payments are making a more expensive trade-off than borrowers at lower APRs doing the same thing. A 30% APR loan over 7 years can cost more in total interest than the original principal borrowed. Understanding this before committing to a term is one of the most useful things the tool offers. Our guide to how bad credit loans affect your credit score also covers the credit file implications of longer-term borrowing.
Frequently asked questions
What is APR and how is it calculated?
APR stands for Annual Percentage Rate. It is the total cost of borrowing expressed as a yearly percentage, and in the UK it is required to include the interest rate and any mandatory fees that are part of the credit agreement. For most personal and secured loans, APR and the interest rate are effectively the same figure, because the main fee structure is the interest itself. Products with arrangement fees built into the rate, or with compulsory insurance products, may show an APR that is higher than the headline interest rate.
The calculation this tool uses is standard UK amortisation: each monthly payment covers the interest accrued on the outstanding balance that month, with the remainder reducing the principal. At the start of the loan, most of each payment is interest. By the end, most of it is principal repayment. This is why paying a loan off early saves a disproportionately large amount of interest relative to the remaining term.
Why is my actual rate higher than the advertised representative APR?
The representative APR is the rate offered to at least 51% of accepted applicants. It is not the rate offered to everyone. Lenders assess each application individually, taking into account credit history, income, existing commitments, employment status, and their current risk appetite. Applicants with adverse credit entries, high debt-to-income ratios, or thin credit files are likely to be offered higher rates than the advertised figure, or declined entirely.
The gap between the advertised rate and the rate you are actually offered can be substantial at the adverse end of the market. Some bad credit lenders advertise representative APRs in the 24% to 30% range but offer rates well above this to the applicants who fall outside the majority profile. Using a soft-search eligibility tool before applying gives a more accurate indication of the personalised rate you are likely to receive. Comparing the personalised rate against the advertised rate using this tool shows whether the specific product is competitively priced for your profile.
Is a secured loan always cheaper than an unsecured one for bad credit?
Not always, but in many cases for larger amounts over longer terms, a secured loan can offer significantly lower rates than an unsecured bad credit product. This is because the lender has the security of a charge over your property, which reduces their risk. For a borrower with adverse credit who owns property with meaningful equity, a secured loan at 15% to 20% APR may cost considerably less than an unsecured bad credit loan at 28% to 35% APR on the same amount and term.
The trade-off is that a secured loan puts your property at risk if you cannot keep up repayments. An unsecured loan does not carry that immediate risk, though non-payment will result in debt recovery action and serious damage to your credit file. For amounts above £10,000 over terms of three years or more, it is worth modelling both options in this tool using the rates you have been quoted for each, to see the total interest difference before deciding which product is more appropriate for your situation. Our guide to secured loans for bad credit covers the eligibility criteria and product landscape in more detail.
How much does improving my credit profile actually save?
The answer depends on which band you move between. Moving from 22% to 15% APR on a £15,000 loan over five years saves roughly £3,000 to £4,000 in interest, depending on precise figures. Moving from 30% to 22% saves a similar amount. These are not trivial sums, and for many borrowers the time and effort involved in improving a credit profile before applying is genuinely worthwhile if the timeline allows.
The most impactful improvements tend to be: reducing credit utilisation below 30%, registering on the electoral roll if not already registered, satisfying any outstanding CCJs or defaults, and allowing time to pass on adverse entries that are approaching the three-year mark. A credit profile that moves from adverse to near-prime can unlock rates two to four percentage points lower. Use the tool to model your current quoted rate against the rate band you might access after improvement, to see whether the wait is financially justified given your specific borrowing need and timeline. Our guide to how bad credit loans affect your credit score covers the mechanics of credit file improvement in more detail.
Does the tool account for arrangement fees?
No. The tool calculates interest costs only, using the APR you enter applied to the loan amount over the selected term. It does not account for arrangement fees, broker fees, valuation fees (on secured products), early repayment charges, or any other costs that may be part of the total cost of the loan.
For secured loans in particular, arrangement fees can be significant. A lender charging 1% to 2% of the loan amount as an arrangement fee on a £30,000 loan adds £300 to £600 to the total cost before interest. Some lenders add this to the loan balance (meaning you pay interest on the fee), while others deduct it from the net advance. Always look at the total amount repayable figure in any formal credit offer, rather than the APR in isolation, to understand the complete cost of the product you are considering.
Squaring Up
APR is a percentage, but it is the pound figure that matters. This tool converts the abstract rate into a concrete cost so you can make a more informed decision about whether to proceed, wait, or shop around.
- The premium figure is the most useful output. The gap between your rate and the benchmark, expressed as a total pound amount across your chosen term, gives you a direct measure of what a lower rate would be worth. That figure can inform whether improving your profile before applying is financially justified.
- Longer terms make high rates more expensive, not just proportionally. The absolute pound gap between a high and low APR grows with term length. If you are at a high rate and considering a long term to reduce monthly payments, model the 7-year column before committing.
- Representative APR is a floor, not a guarantee. Enter a rate two or three points above the advertised figure to model a more realistic outcome if your credit profile is not in the top 51% for that lender.
- Secured loans can offer lower rates for adverse borrowers who own property. If you have equity and a complex credit history, comparing a secured product at a lower rate against an unsecured product at a higher rate using this tool often shows a meaningful difference.
The guides below cover the next steps.
Ready to see what you could borrow?
Checking won’t harm your credit score Check eligibilityAll figures produced by this tool are illustrative examples only. They are based on the APR and loan amount you enter, using standard UK amortisation, and do not constitute a quote, offer, or indicative rate from any lender. Actual repayment amounts, total costs, and rates depend on individual circumstances, credit profile, lender criteria, and market conditions at the time of application. Representative APR means at least 51% of accepted applicants receive the advertised rate; other applicants may be offered higher rates. This tool does not account for arrangement fees, valuation fees, broker fees, or other product costs. It does not constitute financial advice. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.
