# Pricing in plain English: what 0.25% per day really means

*Source: https://credicorp.co.uk/pricing-in-plain-english/*

Most consumer loans quote an annual rate. We quote a **daily rate** — 0.25% per day — because our loans are short. Here’s what that actually adds up to.

## How interest is calculated

Interest accrues every day you have the money, against the **outstanding balance**. As you repay, the balance falls, and so does the daily interest. There is no flat fee compounded against the original principal — you only pay for what you owe, for the days you owe it.

## The cap that matters most

Whatever happens, the **total cost of credit** — all interest and fees combined — is capped at **100% of the original principal**. That cap is in the Business Loan Agreement, and it is hard-coded into our systems. You will never pay back more than twice what you borrowed, even if a loan stays open for the full 84-day maximum term.

## Worked example

You borrow £500 for 60 days, with a single payment at maturity. Daily interest = 0.25% × £500 = £1.25/day. Over 60 days, interest = £75. There is also a one-time £5 establishment fee. So at maturity you repay **£500 + £75 + £5 = £580**.

Pay it back on day 30 instead? Interest is recalculated to £1.25 × 30 = £37.50 plus the £5 fee, so £542.50. No early-settlement penalty.

Try different numbers in our [interest calculator](/interest-calculator/) or run a full quote on the [Business Loans](/business-loans/) page. The headline figures and fees come straight from the same configuration — what you see in the calculator is what we will lend at.

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Credicorp Limited — UK lender to limited companies (Company No. 16093826). credicorp.co.uk