For consumer credit in the EU, the advertised rate is not the whole story: the legally defined APR includes fees. Enter the loan terms and costs to see the effective annual rate.
A "0% financing" offer with an origination fee is not free — the APR reveals the true annual cost. This is the figure EU law requires lenders to disclose prominently.
Use it to compare bank loans, store financing and credit lines on equal footing.
The APR answers "what does this credit cost per year" and not "can I afford it". A long term lowers both the payment and, sometimes, the APR while raising the total repaid — so the APR is the right tool for comparing offers of equal length and the wrong one for choosing a length.
Whether a fee is deducted from the advance or added to the balance changes the arithmetic. Deducted, you receive less than you borrow and the effective rate rises; added, you borrow more than you receive and pay interest on the fee itself. Both appear in the APR, which is precisely why it exists.
Optional insurance sits outside the disclosed figure. Payment-protection cover that is genuinely optional is excluded from the APR by law, so a quote can be entirely accurate and still understate the monthly amount leaving your account. Add any insurance you intend to take before comparing.
Frequently asked questions
What is the APR of a consumer loan?
The legally defined effective annual rate including mandatory costs — origination fees, required insurance, account charges — as set by the EU Consumer Credit Directive. It is the figure lenders must disclose prominently.
Is 0% financing really free?
Often not. A processing or origination fee on a "0%" offer produces a positive APR — sometimes a surprisingly high one on short terms. The APR reveals the true cost.
Which costs are included in the APR?
All costs that are a condition of getting the credit: interest, origination and administration fees, and compulsory insurance. Optional extras you can decline are not included.