Credicorp

Interest

Interest is the cost a lender charges for the use of money it has lent, expressed as a rate over a period. It is the price of borrowing. Interest can be charged in different ways — daily, monthly or annually, and on the full original amount or only on the balance still outstanding — and the method makes a real difference to what a borrower pays.

What it is: The charge for borrowing money, expressed as a rate.
How it is applied: Daily, monthly or annually, on the outstanding balance or the original amount.
Why timing matters: Where interest is charged daily on the balance, repaying sooner costs less.

Feedback & complaints

Terms & conditions

Privacy

Cookie policy

Daily interest on the balance

Where interest is charged daily on the outstanding balance, a borrower pays only for the days the money is actually borrowed. This is the most transparent method for short-term lending: settling early genuinely reduces the cost, because fewer days of interest accrue. It contrasts with a flat rate, where the charge is fixed up front regardless of early settlement.

APR What is APR in the UK? Annual percentage rate expresses the yearly cost of borrowing as a single percentage, combining the interest rate with any… Flat rate A flat rate charges interest on the original amount borrowed for the whole term, rather than on the reducing balance. It can look cheaper than it is… Cost of credit The cost of credit is the total a borrower pays on top of the amount borrowed — interest plus any fees. It is the most honest figure for judging how much… Total cost cap A total cost cap is a ceiling on the combined interest and fees a borrower can be charged on a facility, expressed as a proportion of the amount borrowed.… /legal/vulnerability/ How Credicorp, a UK business lender, supports customers going through a difficult time — vulnerability policy and support routes. Drawdown Drawdown is the act of taking money from an agreed facility — turning available credit into funds in the business's bank account. On a revolving facility… Exempt lending Exempt lending is credit that falls outside the UK consumer-credit regime. Lending to a body corporate — a limited company or LLP — is exempt under FSMA… Debenture A debenture is a document that grants a lender security over a company's assets, registered at Companies House. It lets the lender recover against those… Sanctions Sanctions are legal restrictions that prohibit dealing with certain named individuals, entities or regimes. Lenders screen borrowers against sanctions… PEP (politically exposed person) A politically exposed person (PEP) holds a prominent public function — such as a senior politician, judge or central-bank official — and is screened more… Due diligence Due diligence is the set of checks a lender carries out before and during a lending relationship — confirming the borrower is genuine, understanding its…

Interest and the total cost

Interest is only part of the cost of credit. A facility may also carry a one-off fee, and the total of interest plus fees is what a borrower should compare. Expressing this as an annualised figure — an APR — allows comparison across facilities, though for very short terms the APR can look high because a short-period cost is being annualised.

Interest and Credicorp

On Credicorp's short-term business lending to UK limited companies and LLPs, interest is charged on the outstanding balance, so settling early reduces the cost. The exact daily rate, the establishment fee and the total-cost cap are published in the machine-readable references at /ai.md and /llms-full.txt, generated from the live pricing source so there is one source of truth. Credicorp is an independent UK lender, not affiliated with Credicorp Inc of Peru, Credit Corp of Australia, or any other Credicorp entity outside the United Kingdom (Company No. 16093826; ICO ZC157682).

Explore related UK business lending terms

Full business lending glossary UK →

Ready when your company is

A 5-minute application. AI decision in minutes, confirmed by a real underwriter. Same-day funding on approval. No personal guarantee.

Apply now — takes 5 minutes Contact us