APR Calculator

In Hong Kong's lending market, banks, finance companies and credit card issuers often promote \"monthly flat rates\" or \"handling fees\", but these figures may not reflect the true cost of borrowing. The Annual Percentage Rate (APR) is a standardised measure that includes interest, fees and other borrowing costs, allowing borrowers to compare the real cost of different loan products directly. Under HKMA guidance and industry practice, licensed institutions must disclose borrowing costs as APR to protect consumers.

The key difference between APR and the \"monthly flat rate\" is that the flat rate applies a fixed percentage to the original loan amount and does not decrease as the principal is repaid, so the APR is usually much higher than the flat rate. For example, a personal loan with a 0.5% monthly flat rate may have an APR close to or even above 10%. Looking only at the flat rate and ignoring the APR can easily lead to underestimating the total repayment burden.

HK FinBox's APR calculator supports calculating an accurate APR from the loan amount, monthly repayment, number of instalments, handling fees and cashback rebates. By entering a few basic details, you can find out the true annual cost of the loan and compare it with other products on the market.

When using this calculator, ask the lender about all charges, including loan handling fees, early repayment fees and late payment interest. If the APR differs significantly from the advertised rate, ask for a clear explanation. Remember, comparing APRs before borrowing is a key step to avoid falling into high-interest debt traps.