Difference between the monthly flat rate and the annualized percentage rate (APR)

You can click here to see the difference between the monthly flat rate and the annualized percentage rate (APR).

Monthly flat rate is to calculate the monthly repayment amount for an instalment loan, which can be illustrated in the example below

Example:

Loan Amount = HK$50,000

Monthly flat rate = 0.18% (APR 7.04%)

Repayment period = 60 months

Monthly Interest = HK$90

Handling Fee = HK$62.5

Monthly Repayment Amount = HK$985.83

APR is calculated in accordance with the relevant guidelines referred to in the Code of Banking Practice. Interest is calculated on the basis of a 365-day or 366-day year, including all payable fees/charges such as the handling fee, annual fee, etc. Therefore, APR is a tool for comparing interest rates, and expressing the repayment amount and loan amount ratio.

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