The TL;DR
AER is what you earn on savings. APR is what you pay to borrow. Both are yearly rates that include compounding (and, for APR, fees) so you can compare like with like.
The detail
- Higher AER is better for you; lower APR is better for you.
- A representative APR is the rate at least 51% of accepted applicants get — you might be offered more.
- £1,000 at 4% AER earns about £40 a year; £1,000 at 20% APR costs about £200.
Your 5-minute move
Your 5-minute move
Use the tools and explainers below to check your own numbers.
Related questions
Checked 9 November 2026. General information, not financial advice.