Glossary

Annual Percentage Rate (APR)

The APR is based on the total charge for credit (TCC) and includes interest and other charges which affect the cost of borrowing - even if they are not payable under the credit Agreement itself. The APR is an annualised rate reflecting the timing of such charges, as well as the rates and amounts. The rules for the calculation of the TCC and APR are set out in the Consumer Credit (Total Charge for Credit) Regulations 1980. The OFT has produced a booklet setting out how an APR should be calculated.