2 min read
The cost is the total repayable
Ignore the headline rate for a moment. The cost of a loan is simply the total you hand back minus the amount you received. Borrow £20,000 and repay £23,000, and the loan cost £3,000 — whatever rate was quoted. Ask every lender for this total, including all fees, and compare on that.
What feeds into it
Three things drive the number: the interest rate and how it is charged (a flat rate costs about double a reducing-balance rate), the fees (an arrangement fee can be hefty), and the term (longer means more interest overall). Read the true cost of borrowing.
What it means for you
Compare offers on total repayable, and fold in every fee before deciding.
Credicorp lends to your company, not to you personally, and takes no personal guarantee. See indicative terms on business loans, or apply online in minutes.
You can work out repayments and total interest with the loan repayment calculator.Frequently asked questions
Is the interest rate the whole cost?
No. Fees and the term change the real cost significantly. A low rate with a big arrangement fee can cost more than a higher rate with none. Always compare total repayable.
How do I find the true cost?
Ask for the total repayable including all fees, and divide the extra over the amount borrowed. The true cost of borrowing calculator does this for you.
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Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.