The annual percentage rate (APR) is an informative parameter calculated as annual percentage and shows total cost related to the use of loan (interest, loan contract fee, other loan expenses).
As the procedure and formula for calculating the APR of consumer credit loan has been established by a regulation of the Minister of Finance (of Estonia), it must be used by all lenders issuing consumer credit (granting loans to private persons), such as banks, leasing companies or quick loan providers. This means that loan offers of the same type (such as small loan, home loan) submitted by different lenders can be more easily compared.
Annual percentage rate depends on the loan amount, loan term and other conditions – interest, contract fee, any other single or regular expenses, etc. Thus, loans of the same type granted by different lenders (e.g. study loan, home loan, small loan) have different annual percentage rates.