Comments on: 437 Percent http://www.cornellfinch.com/2008/10/17/437-percent/ Why stop now, just when I'm hating it? Tue, 07 Sep 2010 18:17:40 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Lloyd http://www.cornellfinch.com/2008/10/17/437-percent/comment-page-1/#comment-116 Lloyd Mon, 20 Oct 2008 12:17:31 +0000 http://www.cornellfinch.com/?p=164#comment-116 The APR is the Annual Percentage Rate. It is worked out on the amount of interest you will pay on your load in a year and is alway worked out on the original loan. This amount is on top of your original load Therefore if you were to borrow £ 100 over 12 months you will need to pay back £ 547.40 Mind you these are designed to be short term loans which is why the APR is so high, you would normally look to pay them back in a month or two. The APR is the Annual Percentage Rate.

It is worked out on the amount of interest you will pay on your load in a year and is alway worked out on the original loan. This amount is on top of your original load

Therefore if you were to borrow £ 100 over 12 months you will need to pay back £ 547.40

Mind you these are designed to be short term loans which is why the APR is so high, you would normally look to pay them back in a month or two.

]]> By: Wolfie http://www.cornellfinch.com/2008/10/17/437-percent/comment-page-1/#comment-110 Wolfie Sat, 18 Oct 2008 08:10:42 +0000 http://www.cornellfinch.com/?p=164#comment-110 Sorry, you are a bit out on this one. 437% of £1 is not £437, it's £4.37. £1 = 100 pence 100 pence = 100% 1 pence = 1% 437% = 1 pence x 437 = 437 pence 437 pence = £4.37 Still a very high APR, but on these payday loans I have seen rates of over 1,000%. But APR takes into account costs of the finanace, not just simply the interest charged on the principal, so it's not always as easy as doing a straight percentage calculation. For example, the site you mention offers £1,500 over 78 weeks, and says the total payable is £4,180.80. The APR is quoted as 437.4%, but a straight calculation on £1,500 would actually give you over £6,500 to repay. I've never really looked at APR calculation before, but what it looks like is that it is a black art understood by very few people. I, for one, am baffled. <abbr><em>Wolfie´s last blog post..<a href="http://feeds.feedburner.com/~r/wolfshowl/netQ/~3/422023702/" rel="nofollow">SOTD #92</a></abbr></em> Sorry, you are a bit out on this one. 437% of £1 is not £437, it’s £4.37.

£1 = 100 pence
100 pence = 100%
1 pence = 1%
437% = 1 pence x 437 = 437 pence
437 pence = £4.37

Still a very high APR, but on these payday loans I have seen rates of over 1,000%.

But APR takes into account costs of the finanace, not just simply the interest charged on the principal, so it’s not always as easy as doing a straight percentage calculation. For example, the site you mention offers £1,500 over 78 weeks, and says the total payable is £4,180.80. The APR is quoted as 437.4%, but a straight calculation on £1,500 would actually give you over £6,500 to repay.

I’ve never really looked at APR calculation before, but what it looks like is that it is a black art understood by very few people. I, for one, am baffled.

Wolfie´s last blog post..SOTD #92

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