My loan is interest-free, why does it have an Annual Percentage Rate (APR)?

Even though HandyFin Credit Builder is an interest-free loan, there’s still a subscription fee associated with using the Credit Builder feature. This helps us cover costs such as managing your Credit Builder loan, keeping security held against your loan and the reporting services to all 3 credit agencies.

Due to the FCA regulatory requirement, any fees associated with the loan need to be included in APR. This is why the subscription fee is used to calculate the APR of your Credit Builder loan.

As an example, if you saved £50 a month, your credit builder will automatically issue you a £600 loan (£50 x 12). Because you’re paying £2.50 per month for the credit builder service, the total cost of credit is £30 (£2.50 x 12) over the term of the loan. This equates to an APR of 9.10%.