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The difference between

'APR Variable' and 'APR Typical'

Firstly, for readers who want to know what AER is see this page. For APR see this one.

X% APR variable

Means the cost is currently X% but the interest rate is not fixed and from time to time the interest rate is likely to vary either up or down

For example, 7.9% APR (variable) means that 7.9% might be the rate today but it does not remain at this figure. The most common use of 'variable APRs' is with Credit Cards.

X% APR Typical variable

You'll frequently see this expression in promotions for loans. It means the lender is not being totally specific about the interest rate you will be charged as their rates vary, usually in response to your personal credit rating and the amount of money you want to borrow

Therefore X% APR Typical variable is used to give you a general idea of what interest rate you can expect to pay. The addition of the word 'Typical' means that at least 66% of their approved applications are offered that rate or cheaper.

For example, many of the Sofa shops offer '0% typical APR'. The law therefore states that at least 66% of applicants will get this rate. However, for people with a suspect credit rating they could well be charged 10%, 20% or even more.

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