In terms of credit, the term TAEG is relatively common, if not ubiquitous. Still, for the average person, he sometimes does not want to say much … Reason why, at Astro finance , we chose to tell you more about it: what allow you to subscribe a credit in full knowledge of cause!
The APR, named TEG until recently, refers to the annual percentage rate of charge of a credit. In other words, the APRC is the fee usually charged to a credit.
While the APR obviously includes the interest rate of the latter, this is not all! Also included under the name TAEG: the handling fees, the cost of the compulsory insurance and other expenses of guarantee.
The APRC: for what?
Wikifin , the financial education program of the FSMA (the Belgian Financial Services and Markets Authority), justifies the existence of the APRC as follows:
There are many different types of loans. For ease of comparison, the State requires all lenders to mention a transparent and comparable rate for each loan: the annual percentage rate of charge (APR).
The APR is therefore a “transparent and comparable rate” . It aims to help the consumer to navigate the multitude of products available on the credit market.
Expressed as a percentage, the APR therefore allows you to calculate the exact and total amount that you will have to repay as part of a loan, whether mortgage or consumer. But it also allows you to compare efficiently and safely different offers from various financial organizations.
Because if the interest rate is important, it is not the only criterion you need to consider. The various costs involved in the subscription of a credit of which we spoke to you above (expenses of file, etc.), must also weigh in the balance. The APR therefore has the merit of simplifying your calculations.
The APR in practice: your calculators!
Speaking of calculations … Find the formula you need to apply if you want to find out what is the APR of a credit (although it is obligatorily and clearly mentioned).
TAEG = ((total amount reimbursed – amount of the loan) / amount of the loan) x (12 / number of monthly payments)