Representative APR is the rate a lender must, under FCA consumer credit rules, offer to at least 51% of customers accepted through an advertisement. Up to 49% of accepted applicants can be charged a higher rate, which is why your personal offer can differ from the advertised figure. |
How representative APR works in practice: 100 accepted applicants
| Group | Share of accepted applicants | Rate received |
| Must get the advertised rate or better | At least 51% | Representative APR (or lower) |
| Can be charged more | Up to 49% | Higher personal APR based on credit profile |
| Declined applicants | Not counted | The 51% test only covers accepted customers |
Source: FCA CONC 3.5 (financial promotions rules)
Representative APR is the advertised borrowing rate that at least 51 percent of accepted applicants must actually receive. It lets a lender promote a headline rate, while some approved customers may be offered a higher personal rate after a credit check.
In one line: Representative APR is the rate at least 51 percent of accepted borrowers get, so the rate offered to you can be higher.
How representative APR works
Advertising rules require that the representative APR is given to a majority, defined as at least 51 percent, of customers who take up the advertised deal. The remainder can be quoted a higher rate.
A loan promoted at 6.9 percent representative APR must go to most accepted applicants at that rate. An applicant with a thinner credit history might instead be offered the same loan at 12.9 percent.
The actual rate is only confirmed once an application is assessed, so the advertised figure is a guide to what a typical accepted borrower pays rather than a guaranteed price.
Representative APR vs personal APR
Representative APR is the headline figure used in adverts. The personal APR is the rate an individual is actually offered after their application is assessed.
Because only a majority need receive the representative rate, an eligibility check can show the likely personal rate before a full application leaves a hard search.
Primary source: FCA / Consumer Credit (Advertisements) rules
