eli5: what’s 19.9% APR Representative if I’m buying a phone?


I’m looking to buy a phone for £700 and it says

* **19.9% APR Representative**

Is this money i have to add onto the 700 quid to give to the company? I’m trying to pay it off over the course of 12-24 months.

**Representative example**
You could borrow **£699.00** over **24** **months** with 24 monthly repayments of **£34.99**. The total amount repayable will be **£839.76**.

Idk what this means (i’m a teenager if it wasn’t clear), like why am i borrowing?

Any help is appreciated.

In: 2

Interest will be charged at an APR of around 19.9% depending on various factors, most likely computed every month (not once per year), on whatever unpaid balance remains when interest is charged each month.

You’re borrowing because you’re paying for the phone in monthly payments instead of all at once. Effectively, you’re borrowing the cost of the phone and they’re charging interest on the amount you’ve borrowed.

If you have the means to buy the phone outright (or buy a cheaper model) you won’t be borrowing anything and you won’t have to pay interest

I know you want an explanation, not advice, but fuck it.

Don’t buy a phone with term payments. Either buy a shitty phone you can afford now, or save up to buy the good one in a few months. You’re a teenager, start building good habits now. They’ll last. It’s not worth it spending an extra ~20% over 2 years.

It’s the interest rate you pay annually by paying for the phone over time. So if you’re buying a £699.00 phone, you’ll also be paying £140.76 in interest charges for the ability to pay it back over time in monthly installments.

If you don’t want to pay the interest, then you could pay the full amount up front and avoid the interest.

It means you’re getting ripped off because that APR is absurdly high. If you can’t afford the phone then don’t buy it. That’s basically all there is to say.