What is APR (TAEG), and how does it affect my decision?
The APRC sums up the full yearly cost of the loan in a single figure — interest plus every mandatory charge. It is the number that lets you compare offers on equal footing.
In this guide
What the APRC actually measures
The APRC (Annual Percentage Rate of Charge) expresses the total cost of credit as a yearly percentage of the amount borrowed. It goes beyond the interest rate: it includes fees, taxes, the insurance required to obtain the loan and other contractual charges. That makes it the most complete figure for comparing offers with the same term and structure.
Why two similar offers can cost different amounts
Two offers with similar monthly payments can carry different APRCs. The gap usually sits in insurance, fees or the products the bank asks for in return. Between comparable offers, the lower APRC tends to mean a lower total cost.
The low-spread trap
A lower spread does not always win. Paired with expensive insurance or tied products, it pushes the APRC up and the loan ends up costlier overall. So the APRC is always read alongside the total amount payable, the monthly payment and the contract terms.
Where we come in
Comparing APRCs across banks, each with its own cost structure, is painstaking work. It is part of what we do: we line the offers up and show the real cost of each.
Worked example
Picture two offers for €150,000 over 30 years. Bank A has the lower spread but requires pricier insurance: an APRC of 4.2%. Bank B has a slightly higher spread, with insurance you can arrange separately: an APRC of 4.0%. At a glance Bank A looks better; on the APRC, B costs less overall. (Example figures.)
Sources
Susana Vasconcelos
- Intermediária de crédito autorizada pelo Banco de Portugal n.º 0008496
- Mais de 10 anos na banca