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Busted! Pheabs Catches Barclays Charging 636% Interest On Business Loans

After a recent visit to my local Barclays branch, a smartly dressed bank manager asked if I had ever considered a business loan. To which I very simply asked, certainly, “What are the rates?” The tie and shirt wearing man said, “Just log into the app.” To my utter disbelief, I was amazed to see…

After a recent visit to my local Barclays branch, a smartly dressed bank manager asked if I had ever considered a business loan. To which I very simply asked, certainly, “What are the rates?”

The tie and shirt wearing man said, “Just log into the app.”

To my utter disbelief, I was amazed to see that the repayment calculation presented an astronomic figure where if you borrow £1,000, you will be charged £30,000 in interest over 60 months (5 years).

The maths wasn’t mathing. Taking a screenshot of what I saw (see below), the representative APR suggested is 10.4% APR, but based on the total amount to repay of £31,819, it is either a gross error by Barclays, a major regulated bank, or in fact they are charging 636.38% on business loans.

Such a rate is in fact higher than UK payday lenders and based on the figure being 1.77% interest rate by day, it importantly breaks the FCA’s 2015 law of charging 0.8% per day.

“It seems strange, how could Barclays make such an error?”

I spotted this error more than 3 weeks ago and pointed it out to an embarrassed store manager, who laughing it off said “Well this must be an error. You can still apply.”

“No way Jose! I am not getting caught in those rates!”

Bring Back Wonga!

wonga puppets

Wonga was the notorious payday lender charging interest rates of 6,000% and despite almost being valued at a £1 billion, the company was found to be mis-selling loans and forced to repay £4 billion in compensation.

But back to Barclays, I reported this to the bank manager who said he will look into it. But 3 weeks later, the repayment example is still the same on the app – and checking the illustration through their Online Banking, it is showing the same calculation!

The Business Loan That Barclays is Presenting

10.4% APR Representative based on a loan of £1000 repayable over 60 months at an interest rate of 10.4% a year (fixed). Monthly repayment of £530.32. Total amount you’ll need to repay £31819.

How The Business Loan Should Really Look

10.4% APR Representative based on a loan of £1000 repayable over 60 months at an interest rate of 10.4% a year (fixed). Monthly repayment of £21, total interest of £286. Total amount you’ll need to repay £1,286.00.

Over To You Barclays

I have worked in the short term lending space since 2010, so 15 years in total. I have worked with some of the most honourable and transparent lenders who go to serious lengths to check their compliances, rates and truly look after their borrowers to ensure that they do not take on credit they cannot afford.

The costs and stress that I have seen high street and short term lenders put themselves under is immense – and some have faced reclaims and fines despite their truly best efforts.

I am amazed that a leading world bank has a repayment example showing illegal rates.

I open the floor to them to respond and address this error. And if they would like to give me some free tickets to a Premier League match of my choice, I will gladly accept as compensation. Come on you Spurs.

Last Updated on February 4, 2025 by Daniel Tannenbaum, Founder of Pheabs

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