What does the APR Calculator — True Interest Rate do?

Calculate the true Annual Percentage Rate of any loan from the amount borrowed and total repaid. All calculations are performed in your browser using official UK rates and thresholds.

Does this use current UK interest rates?

You can enter any interest rate to model different scenarios. The Bank of England base rate and FCA guidelines influence typical lending rates available in the UK market.

Should I get professional debt advice?

If you are struggling with debt, free professional advice is available from StepChange (0800 138 1111), Citizens Advice, and the National Debtline (0808 808 4000). This calculator provides estimates only.

APR Calculator — True Interest Rate

Calculate the true Annual Percentage Rate of any loan from the amount borrowed and total repaid.

Last updated: April 2026 · Source: FCA — Understanding interest rates

Amount Borrowed

Total Amount Repaid

Term (months)

Annual Percentage Rate (APR)

14.68%

Monthly Payment

£241.67

Total Interest

£800.00

Monthly Rate

1.22%

Disclaimer

This calculator is provided for informational purposes only and should not be considered as financial or tax advice. All calculations are performed locally in your browser — no personal data is collected or sent to our servers. Rates and thresholds are sourced from HMRC and GOV.UK and are updated for the current tax year. Always verify results with HMRC or consult a qualified professional before making financial decisions.

How It Works

The Annual Percentage Rate (APR) represents the total annual cost of borrowing, including interest and any mandatory fees, expressed as a single percentage. It allows you to compare loan products on a like-for-like basis even when they have different fee structures or compounding frequencies.

In the UK, all consumer credit advertisements must show a representative APR under FCA rules. The representative APR is the rate that at least 51% of successful applicants will receive. Your personal APR may be higher depending on your creditworthiness.

This calculator converts between flat rates, monthly rates and APR. Enter the loan amount, total interest or fees, and term to see the true APR. It is especially useful for comparing hire purchase, credit card and personal loan offers where headline rates can be misleading.

Example: Comparing a flat rate to APR

Loan: £5,000 over 3 years at 5% flat rate
Total interest at flat rate: £5,000 × 5% × 3 = £750
Monthly payment: £159.72
True APR (calculated): approx. 9.4% — nearly double the flat rate

Source: FCA — Understanding interest rates

Frequently Asked Questions

What does the APR Calculator — True Interest Rate do?: Calculate the true Annual Percentage Rate of any loan from the amount borrowed and total repaid. All calculations are performed in your browser using official UK rates and thresholds.
Does this use current UK interest rates?: You can enter any interest rate to model different scenarios. The Bank of England base rate and FCA guidelines influence typical lending rates available in the UK market.
Should I get professional debt advice?: If you are struggling with debt, free professional advice is available from StepChange (0800 138 1111), Citizens Advice, and the National Debtline (0808 808 4000). This calculator provides estimates only.