The calculation of the TAN consists of applying the interest rate to any financing, from personal loans to mortgages. One of the traits that almost all loans have in common (with the exception of non-interest bearing loans) is the request for payment of an interest rate, expressed as a percentage of the capital disbursed by the bank. Yet many loan offers advertise zero interest, prompting the consumer to believe, by making a quick mortgage or loan simulation, not to pay interest. It is not always true.
In fact, it is very important to distinguish between two types of interest rates: the TAN, the nominal annual rate , and the APR, the annual percentage rate . The TAN expresses on an annual basis the “real” interest rate applied to the loaned capital. It can be fixed, and never change during the loan repayment period, or variable, changing depending on the trend of an international reference rate established at the time of signing the contract. The calculation of the TAN can therefore be done by applying the percentage of the rate (for example: 2%) to the amount lent (for example: 1000 euros: result equal to 20 euros).
The actual costs incurred for the loan could however be higher: these additional expenses are instead counted by the APR. The calculation of the APR takes into consideration other types of costs with respect to interest only: from the costs of opening the loan (for example, the costs of preliminary investigation) to the periodic expenses linked to the payment of the installments. Only notary fees are excluded. As a result, the APR is generally higher than the TAN.
When we talk about zero interest, therefore, we must not only think about how the TAN is calculated, but also consider the APR: the TAN could also be really zero, without the customer having to pay certain interest, but at the same time it is likely that the APR is higher than zero. This means, however, that there will be expenses to be incurred.
In any case, to easily carry out the calculation of the TAN it is sufficient to turn to one of the many web portals dedicated to this operation, reachable through a simple search on a search engine. You will be asked for some information, such as the loan and installment amount, the duration of the loan and other information on ancillary costs (if you are also interested in the APR).