the advert above

[Thunderchild]

has anybody seen the advert on the top of answerbank offering loans at 180 odd % ? yikes

[Oneeyedvic]

It is probably for a short term loan - and this is where APRs make no sense at all.

Two examples for you:

We (finance company) used to offer credit to local shops to help sell their products. As an example, if you purchased a computer costing �400.00, you could pay it off at �40 per month but over 11 months - so the total repayable would be �440.00 and we would make �40. Most people would consider this to be an APR of about 10% - in fact it is not - it is about 25%.

Second example:

If I lent you �25.00 this Friday and two weeks later you gave it back to me and bought me a pint for my troubles (costing �2.50), this would be an APR of over 300%

APRs are only useful for comparing like for like quotations - and really don't work very well for short term loans.

[Thunderchild]

well there is an example on the add borrow 300 pay back 500