The term APR stands for the Annual Percentage Rate of charge and represents the price you are paying for the credit you are borrowing. APR is a great way to compare different credit and loan offers and APR takes into account both the interest on the loan and other charges you have to pay.

All lenders must tell you their APR before you sign an agreement and the APR will of course vary from lender to lender. Generally speaking for the consumer, the lower the APR the better the deal and don’t forget that in most cases bank loans and credit deals are cheaper than the credit schemes offered by stores – remember to check the rate on the high street and don’t be swayed by introductory offers.

When checking the rate of APR on offer remember to check if the interest included in the APR varies, or is a fixed rate. If the rate is variable, your repayments could go up or go down. If the rate is fixed, your repayments will stay the same.

Remember also to check if there are any additional charges that are not included in the APR, this commonly includes optional services such as payment protection insurance or card insurance. If this is the case make sure you fully understand what you are paying for and decide whether or not you really need it before signing up.