Most consumer loans quote an annual rate. We quote a daily rate — 0.25% per day — because our loans are short. Here’s what that actually adds up to.
How interest is calculated
Interest accrues every day you have the money, against the outstanding balance. As you repay, the balance falls, and so does the daily interest. There is no flat fee compounded against the original principal — you only pay for what you owe, for the days you owe it.
The cap that matters most
Whatever happens, the total cost of credit — all interest and fees combined — is capped at 100% of the original principal. That cap is in the Business Loan Agreement, and it is hard-coded into our systems. You will never pay back more than twice what you borrowed, even if a loan stays open for the full 84-day maximum term.
Worked example
You borrow £500 for 60 days, with a single payment at maturity. Daily interest = 0.25% × £500 = £1.25/day. Over 60 days, interest = £75. There is also a one-time £5 establishment fee. So at maturity you repay £500 + £75 + £5 = £580.
Pay it back on day 30 instead? Interest is recalculated to £1.25 × 30 = £37.50 plus the £5 fee, so £542.50. No early-settlement penalty.
Try different numbers in our interest calculator or run a full quote on the Business Loans page. The headline figures and fees come straight from the same configuration — what you see in the calculator is what we will lend at.
