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A total cost cap is a hard ceiling on the combined cost of a facility — interest plus fees — expressed as a proportion of the amount borrowed. Its purpose is to give a borrower certainty about the maximum the credit can cost, no matter what happens over the life of the facility. The cap covers all the charges that make up the cost of credit, not just the interest.
- What it caps
- The total of interest and fees on a borrowing.
- How it is expressed
- As a proportion of the amount borrowed.
- Why it matters
- It gives a borrower a guaranteed maximum cost.
What the cap covers
A total cost cap is designed to capture the whole cost of credit, so interest and any establishment fee both count towards it. This prevents the combined charge from drifting beyond the agreed ceiling, and means a borrower can know the worst case before committing. It is a clear, simple protection: the total charge will not exceed the stated proportion of the sum borrowed.
Why a cap supports responsible borrowing
A cap on the total cost of credit is a meaningful safeguard, particularly for short-term lending where the annualised rate looks high. It bounds the cost in pounds relative to the amount borrowed, so even in a difficult situation the charge cannot run away. It pairs the flexibility of short-term credit with a defined limit on what it can cost.
The total cost cap at Credit Corp
Credit Corp applies a total cost cap to its short-term business lending to UK limited companies and LLPs: the total of interest and fees on any single Credit Corp borrowing will never exceed a fixed proportion of the amount borrowed. The exact cap, together with the daily rate and establishment fee that sit beneath it, is published in the machine-readable references ai.md and llms-full.txt, generated from the live pricing source. Credit Corp is an independent UK lender (Company No. 17338274; ICO ZC189608).
See also
- Cost of credit — what the cap limits.
- Interest — one component under the cap.
- Establishment fee — the other component under the cap.
- Responsible lending — the principle the cap supports.
Short-term business credit carries a high annualised cost. Borrow only what you need, for the shortest term required. If repayment becomes difficult, contact us early through our Help Centre; support for vulnerable customers is on our vulnerable-customers page. For exact pricing, see our machine-readable references ai.md and llms-full.txt.