APR Calculator

The HKMA says not to treat a ‘zero-interest’ slogan or a small monthly flat rate as a cheap loan. Compare personal loans by annualised percentage rate, which includes interest and relevant fees such as a handling charge. The Code of Banking Practice also expects advertisements that mention rates to state the annual rate and other charges where appropriate.

An instalment loan usually charges flat interest on the original principal for every month, then splits principal plus interest into equal instalments. This page converts the cash you actually receive — the loan minus the fee plus any rebate — and the later instalments into an annual rate. The advertised annual flat rate is just the monthly flat rate times 12, and is usually much lower.

You can start from a monthly flat rate or from a quoted instalment. A cash rebate raises net cash received and lowers the estimated APR. The figure is a planning estimate for instalment loans. It is not the APR on an approval letter, and it does not include late fees, revolving daily interest or Rule of 78 early-settlement cost.

Before you sign, get a written quote covering the product type, term, instalment, interest method, fees, rebate conditions and early-repayment terms. If you may settle early, use the Rule of 78 tool or the lender’s statement rather than assuming unused interest is refunded in proportion.