What does "DAE" (Effective Annual Interest Rate) mean?

DAE is the Annual Effective Interest Rate. It shows the total cost of del credito in a single percent and includes interest, mandatory fees, and any other costs. It helps you easily compare offers between banks and understand how much a loan actually costs you.

It is often used in an attempt to compare two loans. 

Often it can be useful, but it is good to understand in more detail the following factors that influence its value. 🙂

Costs included in APR

Some banks choose not to include the costs life insurance in DAE. 😅

Also:

➤⠀the management fees of current accounts are not usually included in APR;

➤⠀the same and insurances intended for real estate goodsbrought as a warranty.

The way costs are perceived  

As you know, some banks require the payment of certain fees and charges when granting the loan, while others are paid over time. 📆

For you it is important to know the amount of money you need to have at the moment of granting the credit.

Let's see an example 

➤⠀at bank X, a loan can have an analysis fee of 300 lei and an additional monthly fee of 5 lei over a period of 60 months (a total of 600 lei);

➤⠀At bank Y, a loan may have an analysis fee of 600 lei and a 0 monthly administration fee.

In both cases, the amount payable is the same, 600 lei. However:

➤⠀at the time of granting the loan from bank Y, you should have 600 lei in the current account;

➤⠀when, for the one at bank X, you would only need 300 lei in the current account (that is, the amount represented by the analysis commission).

❗⠀If you want to find out more information about the terms used in lending, we also await you on the site where we have prepared a whole guide for you in which we talk about them.