Core Principles
Clear disclosures: A standard APR lets you compare funding against overdrafts or credit cards.
Responsible lending: Pricing shown plainly so you can make an informed choice.
Premium Funding Code of Practice
Effective Date: September 2024 | Version: COP-NZ-2024-V1
When you fund an insurance premium, you deserve to see exactly what the credit is costing you. FG Finance Limited chooses to follow a transparent-pricing standard for premium funding, so the numbers on your loan are easy to read and easy to compare.
In practice that means every set of FG Finance loan documents shows the cost of your loan two ways — as a Flat Rate and as an Annual Percentage Rate (APR). Both describe the same dollars of interest; they just express them differently.
The short version
Does a higher APR mean I pay more?
No. The number of dollars you pay in credit charges is identical whichever rate you look at. The APR only looks like a bigger percentage because it measures those same charges against a loan balance that shrinks as you repay it.
The Annual Percentage Rate (APR)
The APR measures interest against your loan balance as it actually falls over the term, then states that as a yearly percentage. It's the same idea used for a home loan or a business term loan, where each instalment pays off part of what you owe. Because it accounts for the reducing balance, it's the more meaningful figure for comparing finance options.
Fees such as the one-off application fee sit outside this calculation.
The Flat Rate
The Flat Rate simply divides the total credit charges by the original premium you funded. It ignores both the length of the loan and the fact that your balance is dropping as you pay, which is why it reads lower than the APR even though the dollar cost is the same.
Fees such as the one-off application fee sit outside this calculation too.
Why we show both
Showing the APR next to the Flat Rate lets you line a premium funding loan up against everyday credit — an overdraft, a business credit card or other short-term finance — on a like-for-like basis. You'll find both rates on the online acceptance screens in our broker portals and set out in the credit schedule of your Offer to Borrow for Insurance Premiums.