Interest rates

The interest is what you pay a bank to lend you money or what the bank pays you when you deposit your savings.

General points

Understanding the basics of interest rates and how they work will help you work out how much a loan is going to cost or how much you will earn on a deposit.

The nominal interest rate (NIR) and the Annual Percentage Rate (APR)

The nominal rate of interest is what the bank charges for loans or pays on deposits. The APR is the nominal interest plus any associated fees and expenses, so as to give a measure of the real cost or return.

Interest rates applied by credit institutions

Banks are free to set their own interest rates. However, for statistical purposes, they are obliged to inform the Banco de España of their lending and borrowing rates.

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