Percentages can make things look much bigger than they really are. Take loans for instance, 8% looks good until you realise that you'll pay that 8% every year, then the important factor really becomes how long you keep the loan.

I saw a TV documentary about the negative aspects of short term loans and one of the things pointed out was their ‘Gigantic’ interest rate; a whopping 1355%, I thought to myself, my goodness, who’d put up with such robbery?
Looking into it a little deeper, I realised this was calculated based on an Annual Percentage Rate(APR), whereas short term really means a month or two. And the loan provider essentially charges £20 for every £80 which makes it 25%.
25% in itself is still high but a £5000 at 8%APR paid back over 5 years ends up at £6042.92, which is just over 20% in overall cost of borrowing.

So we see the two are not that different, if only they pointed that out instead of just scaring people with huge percentages.

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