Additional expenses

A personal loan can involve a number of extra expenses that you should weigh up when choosing an offer.

These charges often include:

  • Assessment fee: this is usually a percentage of the amount applied for, and is charged to cover the cost of assessing the risk of the loan. This fee cannot be charged if the loan application is turned down, although the fees of any third parties involved may be charged, if this is what is stated in the agreement.
  • Arrangement fee: this is charged for the formalities carried out by the bank when arranging the loan. It is generally a percentage of the amount applied for (or of the credit limit in the case of credit facilities), and is normally a single charge paid when the agreement is signed. 

The terms and conditions may allow for additional charges during the lifetime of the loan:

  • Fee for changing the loan conditions or security: if you arrange any changes to the conditions of your loan with the bank, you will have to pay for any formalities involved and the cost of analysing the risk of the loan under the new conditions.
  • Debt recovery fee: if you stop paying, the bank may take action to recover the unpaid amounts and will charge you for any costs incurred.

In the case of consumer credits and loans subject to Law 16/2011 of 24 June 2011 on credit agreements for consumers (In Spanish)Abre en ventana nueva, if you repay a loan early, the bank may apply an early repayment charge, provided the loan is fixed rate at the time. This fee may:

  • Be up to 1% of the repaid amount, if there is more than a year of the term left.
  • Be up to 0.5% of the repaid amount, if this remaining term is less than a year.
  • Not exceed the interest you would have paid during the remainder of the loan term
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