How do I understand my Interest rate and what is APR? ✍🏼 – Abound

Understanding Your Interest Rate & APR

At Abound, we want to make sure everything about your loan is clear — especially when it comes to what you’re paying. Two key things you’ll see on your loan statement are your interest rate and your APR (Annual Percentage Rate). Here's what they mean, how they're different, and why the APR may change over time.

🔢 What’s the interest rate?

Your interest rate is the basic cost of borrowing your loan. It’s the fixed percentage we charge on the money you’ve borrowed — and it stays the same throughout your loan. Think of it as the agreed price for using the funds.

✅ It won’t change, no matter how or when you make your repayments.

📊 What’s the APR?

Your APR (Annual Percentage Rate) includes your interest rate plus any fees you’ve been charged — like an arrangement fee — spread across the life of the loan. It shows the true cost of borrowing, expressed as a yearly percentage, and makes it easier to compare loans.

🔄 Why does my APR change?

While your interest rate stays fixed, your APR might change slightly over time — and that’s totally normal.

This happens when:

You make early repayments
You settle your loan before the end of the term
Extra fees (if any) are applied
The actual duration of your loan changes

Because the APR reflects the real cost over time, if anything affects that cost or duration, the APR is adjusted to reflect your specific situation.

🏖️ A simple way to think about it

Imagine booking a holiday:

The interest rate is like the nightly cost of your hotel — fixed and agreed upfront.
The APR is like the full cost per night once you’ve added extras like booking fees, airport taxis, and a cheeky minibar snack. If you leave early or add a charge, the average cost per night shifts — even though the room rate stayed the same.

👀 Where can I see my rate and APR?

You can view both your interest rate and APR clearly listed on your loan statement. If you’re ever unsure or want to chat it through, our team is always happy to help.

Still have questions?
Drop us a message or check our full list of FAQs — we're here to make borrowing simple and transparent.

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