Flat rate to APR converter: compare any rate
Business finance is quoted in different ways: a flat rate, a factor rate, a monthly rate or an annual rate. Pick how your quote is shown, enter the rate and the term, and see the same cost in every other form, including an equivalent APR.
APR (effective, equivalent)
21.38%
- Flat rate per year
- 10.80%
- Factor rate
- 1.2160
- Nominal annual rate (monthly × 12)
- 19.53%
- Monthly rate
- 1.63%
- Rate per 30 days
- 1.61%
Every figure assumes equal monthly repayments over the term you enter. The APR is the fairest single figure for comparing quotes. A flat rate or factor rate always looks lower than the APR for the same cost. Fees are not included.
Check eligibility for this amountIllustrative only. Actual rates, fees and terms depend on your circumstances and the lender. This is not an offer of finance.
How this calculator works
Choose the kind of rate you were quoted, enter it, and set the term in months. The term matters for flat and factor rates, because the same flat or factor rate costs far more each year when it is repaid quickly.
The main result is the equivalent APR on a reducing balance with monthly compounding, which is the fairest single figure for comparing quotes. You also see the flat rate, factor rate, nominal annual rate (the monthly rate × 12), monthly rate and rate per 30 days.
For illustration only: a 10.8% flat rate over 24 months works out at a factor rate of 1.2160 and an equivalent APR of about 21.38%. A 5% flat rate over 36 months is about 9.72%. As a rough rule, an APR is often 1.8 to 2 times the flat rate, depending on the term.
Business lenders in Ireland do not have to quote an APR (that legal duty comes from consumer credit law), so this is an equivalent APR worked out from equal monthly repayments, for comparison only. It assumes equal monthly repayments and leaves out fees unless they are built into the rate you enter. Use the APR calculator to include an upfront fee.
Want to understand the product first? Read our guide to business loans.
Flat rate to APR converter: compare any rate: common questions
What is the difference between a flat rate and an APR?
A flat rate charges interest on the full amount borrowed for the whole term, even as you repay it. An APR charges interest only on the balance still owed and allows for monthly compounding. The same cost therefore looks much lower as a flat rate: an APR is often 1.8 to 2 times the flat rate, depending on the term.
How do I convert a factor rate to an APR?
Choose “Factor rate” in the list, enter it (for example 1.20) and the term in months. The converter finds the monthly rate that gives the same total repayable with equal monthly repayments and turns it into an APR. A 1.20 factor rate over 12 months is about 41% APR; over 6 months it is far higher.
What is the difference between nominal and effective APR?
The nominal annual rate is simply the monthly rate × 12. The effective APR also counts interest on interest, compounding monthly, so it is a little higher. The legal APR used for consumer credit in Ireland and the EU is an effective rate, which is why the converter shows the effective figure first.
Must business lenders quote an APR in Ireland?
No. The duty to show an APR comes from consumer credit law, which covers individuals, not limited companies. Regulated lenders lending to small businesses must give you the interest rate, fees and charges in writing before you sign, but many business quotes use a flat or factor rate. That is why converting them helps.
What is a rate per 30 days?
Some short-term and revenue-based providers state a cost per 30 days. The converter compounds that rate over the year (365 ÷ 30 periods) to give the equivalent APR. A small-looking rate per 30 days can be a high annual rate, so convert it before comparing offers.
Does the converter include fees?
No. It converts the rate you enter. Arrangement or documentation fees add to the true cost, so ask for them in writing and use our APR calculator, which includes an upfront fee taken from the loan. Comparing the total amount repayable over the same term is the simplest check of all.
Is the converted rate a quote?
No. It is a mathematical conversion on equal monthly repayments, for comparison only. A lender’s own figures may differ because of fees, repayment timing or variable rates. Ask each lender for the total repayable and all fees before you decide.
Check in 60 seconds
Get real figures for your company
Checking involves no credit search and is not recorded on the Central Credit Register. No obligation.
- No credit search, not recorded on the Central Credit Register
- One request, several lenders: we’re a broker, not a lender
- For limited companies registered in Ireland
- No fees for your company: we’re paid commission by the lender
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