The APR (Annual Percentage Rate) is the interest rate that indicates the cost of a loan or the return on a savings product.
The Annual Percentage Rate (APR) is calculated using a formula that takes into account the interest rate you are charged (TIN), how often you have to make payments each year (these may be monthly, quarterly, annually, etc.), and bank charges. Ultimately, the APR provides a single, clear percentage that allows for straightforward comparison of different financial products to identify the optimal choice. It is important to note that a loan's APR excludes late payment fees and certain additional costs, such as notary fees.
For variable-rate loans or credit facilities, the APR is calculated assuming the interest rate remains unchanged from the time of calculation. This is known as “APR Variable” and is provided for information purposes only, as the interest rate is subject to change over time.1
In Spain, it is compulsory for the Annual Percentage Rate to be shown on all documents and advertisements for financial products. This is to ensure that customers always have the information they need to make decisions.2
Sources:
11 BBVA (n.d.) What is the APR? https://www.bde.es/wbe/es/
2 Institute of Stock Market Studies. What are the TIN and the TAE? https://www.ieb.es/
