Understanding the Key Facts Statement (EIR/APR)
The Key Facts Statement is the standardized disclosure a borrower sees before they sign. It shows the true cost of the loan — including the effective interest rate (EIR/APR) — so the borrower is agreeing to figures they can actually see and compare.
What it discloses
- The principal, tenor and repayment schedule generated for the loan.
- The effective interest rate (EIR/APR) — the annualised true cost including fees, not just the headline nominal rate.
- Fees and charges that apply to the loan.
- The total amount the borrower will repay over the life of the loan.
Why it is shown before signing
Presenting the true cost up front is a consumer-protection principle: a borrower comparing two loans should be able to compare their real cost, not two differently-quoted nominal rates. Because the statement is generated from the same schedule the loan will actually run on, what the borrower sees is what they get.
A flat rate and a reducing-balance rate that look similar can have very different true costs. The EIR/APR on the Key Facts Statement is what makes them comparable — you can explore the difference in the flat-vs-reducing-balance and EIR/APR tools.