APR on lending products

Unlike the nominal rate of interest, which only considers the price banks charge for lending money, the Annual Percentage Rate (APR) also takes the associated fees and expenses into account.

How is the APR of a loan calculated?

The APR is calculated based on the compound interest rate assuming that the interest obtained is reinvested at the same rate.

Use our calculator to find the APR on a loan (in Spanish) (mortgage or personal) so you can compare different types of loans.

The APR allows you to compare different loan or credit offers, independently of their specific conditions.

When comparing loans, distinguish between:  

  • The APR, which is the rate to look at before taking out the loan.
  • The remaining effective cost, which is a reference indicator representing the actual cost of repaying the loan over the remaining term until the loan matures. Use this rate when comparing an existing loan to other loan offers, as you need to focus on the amount remains to be paid.

Banks are obliged to inform  customers of the APR –or remaining effective rate, where appropriate– in all product advertising where costs are mentioned, in contracts signed with customers, in binding offers, and in settlement documents.

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