Why is my Borrow More interest rate different?📈

When you apply to "Top-Up" your existing Abound loan, we don't simply give you a second, separate loan. Instead, we combine your remaining balance with the new amount you wish to borrow into one single, consolidated Credit Agreement.

This results in a "Blended Rate," which may be different from your original APR for three main reasons:

1. The Weighted Average (Blended Rate) 
   Because your new agreement merges two different amounts of money, the interest rate is recalculated. We take the interest rate from your original balance and combine it with the current market rate for the additional funds you are borrowing.

2. Changes in Market Conditions 
   The "cost of borrowing" for lenders changes over time. If the base interest rates in the UK have risen since you took out your first loan, the rate for the new portion of your money will likely be higher than your original rate.

3. Your Updated Financial Profile 
   Unlike traditional lenders who only look at your past, Abound uses Open Banking to look at your current situation.

• If your income has increased or your spending habits have improved, you might qualify for a lower rate on the new funds.

• Conversely, if your monthly outgoings have significantly increased, the rate may reflect that change in risk.
  
   

Key Benefits of the Top-Up Model

• One Monthly Payment: You don’t have to juggle multiple due dates; everything is consolidated into one clear payment.

• Full Transparency: Before you sign the new agreement, we will show you exactly how the new APR is calculated and what your new total monthly repayment will be.

• No "Double" Fees: You aren't paying two sets of administrative costs; it’s one streamlined service.
  
   

Important Note: When you top up, your original loan is technically "settled" and replaced by the new one. This means your loan term (the number of months left to pay) may also change depending on the options you choose during the application.