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APR Calculator UK — Convert Flat Rate to APR

Last updated: April 2026

Calculate Your APR

Equivalent APR
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Monthly payment
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Total interest
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Total repayable
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The APR shown is an approximation calculated using the standard UK method. The exact APR on your agreement may vary slightly depending on fees, payment timing and how your lender calculates interest.

Flat rate interest is calculated on the full loan amount for the entire term: Total interest = Loan × Flat rate × Years. To convert to APR, we use the approximation formula: APR ≈ (2 × n × I) ÷ (P × (N + 1)) where n = payments per year, I = total interest, P = principal, and N = total number of payments. This gives a close approximation of the true APR as defined by the UK Consumer Credit Act.

A common approximation is APR ≈ flat rate × 2 × number of years ÷ (number of years + 1). For example, a 5% flat rate over 3 years gives roughly 5% × 2 × 3 ÷ 4 = 7.5% APR. Our calculator uses a more precise method for accurate results.

In the UK, a good APR for an unsecured personal loan is typically between 3% and 7% for borrowers with strong credit scores. Rates above 10% are common for lower credit scores. Car finance deals often advertise flat rates which look lower but convert to a higher APR — always compare the APR, not the flat rate.

Because a flat rate charges interest on the full loan amount for the whole term, even though your monthly payments are reducing the balance. In reality, you're paying interest on money you've already paid back. APR adjusts for this and shows the true annual cost — which is always higher than the flat rate equivalent.

Not exactly. The interest rate is the basic cost of borrowing, while APR includes the interest rate plus any mandatory fees and charges spread over the loan term. In the UK, lenders are legally required to show the APR so consumers can compare the total cost of different credit products fairly.

Yes. Under UK Consumer Credit Act regulations, any lender or dealer advertising credit must show the representative APR. Many car finance deals are quoted with a flat rate which appears lower — but the APR (which they must also disclose) shows the true cost. Always check the APR before signing.

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This calculator provides estimates for guidance only. Results are based on the figures you enter and use a standard approximation formula. This is not financial, legal or professional advice. The actual APR on any credit agreement may differ depending on fees, payment timing and your lender's calculation method. Always check the APR on your credit agreement before signing. For regulated financial advice, speak to a qualified financial adviser.