Centaurian Commercial Capital has access to all types of lending partners. Some of our partners provide Fintech lending. One of the definitions of Fintech lending is:
“Facilitating peertopeer (P2P) lending, where individuals can lend money directly to other individuals or businesses through online platforms, bypassing traditional financial institutions”
Let’s take a look at how APR (Annual Percentage Rates) are calculated with Fintech loans.
When it comes to calculating the APR (Annual Percentage Rate) for Fintech loans, there are a few things you need to keep in mind. APR is the interest rate plus any fees or charges associated with the loan, expressed as a percentage of the total amount borrowed. Here are the steps to calculate the APR for Fintech loans:
 Determine the interest rate: The first step in calculating the APR is to determine the interest rate on the loan. This is the percentage of the loan amount that the borrower will pay in interest over the life of the loan. Fintech loans typically have variable interest rates, which means the rate can change over time.
 Identify any fees or charges: In addition to the interest rate, Fintech loans may also have fees or charges associated with them, such as origination fees, processing fees, or prepayment penalties. These fees can significantly affect the APR, so it's important to include them in your calculations.
 Calculate the total cost of the loan: To determine the total cost of the loan, you need to add up the amount borrowed, the interest charged, and any fees or charges associated with the loan. This will give you the total amount that the borrower will need to repay over the life of the loan.
 Calculate the APR: Once you have the total cost of the loan, you can calculate the APR using a formula. The formula for APR is:
APR = [(Total cost of loan / Loan amount) / Loan term] x 365 x 100
Where:
 Total cost of loan = Amount borrowed + Interest charged + Fees or charges
 Loan amount = The amount of money borrowed
 Loan term = The length of the loan in days
 Interpret the APR: The APR will give you a sense of how expensive the loan is over time. A lower APR means that the loan is less expensive, while a higher APR means that the loan is more expensive. It's important to keep in mind that APR doesn't take into account other factors that can affect the cost of the loan, such as the timing of payments, the length of the loan, or any prepayment penalties.
In summary, calculating the APR for Fintech loans involves determining the interest rate, identifying any fees or charges, calculating the total cost of the loan, and using a formula to determine the APR. By understanding how to calculate the APR, borrowers can make more informed decisions about the cost of their loans and avoid taking on debt that they can't afford.

Yvette Stephens 
The Creative Funder, Centaurian Commercial Capital



