Lender in Focus 7.4: Ferratum Loans how repayments work and APR

Ferratum apr and how repayments work

Ferratum apr and how repayments work

If you want to compare the costs of borrowing with other lenders, the Ferratum APR is a good place to start.

Whenever you take out a loan of any kind, whether a short-term loan, instalment loan or payday loan, you should make sure you fully understand any costs and fees involved.

A lender’s APR is a good benchmark against which to compare other lenders. CashLady takes a look at the Ferratum APR to see what kind of deal its customers are getting.

Payment schedule

Ferratum offers its customers the opportunity to apply for two different types of loan:

Micro loan

New customers can apply for a micro loan of between £50 and £300. After this loan has been repaid in full, you can also apply for another loan of up to £500.

The micro loan term is between 7 and 37 days.

PlusLoan

A PlusLoan is an instalment loan. This means that you will pay it back in 2 or more instalments.

New customers can apply for PlusLoans of between £300 and £500. This can be repaid over a period of between 2 and 4 months.

Existing customers could be invited to apply for a PlusLoan of up to £1,000, which can then be repaid in up to 6 months. Eligible customers will see ‘PlusLoan’ as an option when they log into their ‘My Ferratum’ account.

Your PlusLoan repayment term will depend on the amount of money you borrow.

For example, a £300 PlusLoan may only be able to be taken out over 2 or 3 months. A £400 PlusLoan can be taken out between 2 and 4 months. Yet, a £500 PlusLoan between 3 and 4 months but a £600 PlusLoan can be taken out between 3 and 6 months.

How are repayments taken?

Ferratum will automatically debit customers’ bank accounts with the amount due on their loan repayment date.

Your repayment date would normally be set for your next pay day. For example, if you took out a micro loan for a loan term of 37 days and were paid weekly, you may be able to split your repayments over your 5 pay dates.

If you would like to repay before your loan due date, you can call Ferratum on 0151 601 8611 or text: TAKE PAYMENT to 07860 020302.

You are also able to make partial payments.

Alternatively, you could use your online banking facilities to transfer payments to Ferratum. Use the Sort code: 09 07 20 and account number: 01815199. You will need to include your full name as a reference.

How much will my repayments be?

Your repayment amount will depend on the amount of money you have borrowed, your interest rate and the term of your loan. Ferratum will inform you of how much your repayment/s will be when you take out your loan.

Will I be charged less if I repay my loan early?

Ferratum does not charge any penalties for repaying your loan early. As interest is calculated daily, you could actually save money by repaying your loan before your loan repayment due date.

Can I change my repayment date after I have taken out a loan with Ferratum?

On the day Ferratum set up your loan, they will send you a text message asking if they have got the right loan due date. As well as giving you the opportunity to change it.

They should also send another similar message, 3 days prior to your due date.

Ferratum can change the date twice if they are given sufficient notice. Interest will continue in all cases.

Table of borrowing

The table below shows some examples of what you could expect to pay back with Ferratum.

Ferratum table of borrowing

What is the Ferratum APR?

APR is Annual Percentage Rate.

Direct comparisons can be made with other lenders’ interest charges by using the APR.

Ferratum’s representative APR is 1270%.

How does Ferratum’s APR compare to the APR of other lenders?

CashLady has picked some other short term lenders at random so that you can see how the Ferratum APR compares:

The Money Shop

The Money Shop has a representative APR of 450%.

For example: If you took out a loan of £100 and paid it back over 3 instalments, you could expect to repay a total of £136.98.

Lending Stream

Lending Stream has a representative APR of 1272%.

For example: If you borrowed £200 over 6 months you would repay £391.68 in total.

QuickQuid

QuickQuid has a representative APR of 1295%.

For example: If you took out a loan of £200 for 84 days, you would repay £334.40 in total. Of this total repayment amount, £134.40 would be interest.

Ferratum daily cap

ferratum apr daily cap

As per the FCA rules, a lender can charge a maximum of 0.8% per day in interest. This means that for every £100 you borrow, you will pay a maximum of 80p per day in interest.

Total loan value repayment cap

As an FCA-authorised and regulated firm, Ferratum must follow these rules:

• Fees and interest per day must not exceed 0.8% of the amount borrowed

• Default fees must not exceed £15, although interest can still be charged after default (but only at or below the initial rate)

• Borrowers will never pay more in interest and fees than 100% of the total amount they borrowed.

Therefore, you should never repay Ferratum more than 100% of the amount that you borrowed from them.

Ferratum also says that it will freeze all interest charges after 60 days past your loan due date.