If you want to make better decisions regarding different types of financing, from personal loans to credit cards and loans, it is essential to understand the difference between APR and TAN!

This is because these are the two rates that organize the interest rate values of all financing. However, each rate has its own particularity and works in a specific way.

Therefore, there may be different charges for a loan based on TAN and another based on APR. Therefore, this is one of the fundamental elements for you to make good financing choices.

But first, do you know what each acronym means? The TAN is the Nominal Annual Rate! Meanwhile, APR is the Global Effective Annual Rate! Do you want to know and understand more about how they impact your credit? Keep reading!

Firstly, if you are looking for some type of personal credit, it is worth paying attention to other facts besides the interest rate and the charges that come with the TAN and the APR!

So, firstly, it is important to consider whether you really need that money or whether there is some other way to get what you want, be it a home, car or some type of service.

Also, check if it is not possible to pay with a savings account or card. In many cases, card rates may end up being more attractive. Furthermore, confirm that the financial entity is registered to offer credit!

In fact, more and more banks and financial institutions offer advantages and benefits when signing up for a specific credit card. So, take into account some factors besides the rate.

Think, for example, what the benefits are, such as cashback and whether the return values have the potential to offset the interest expenses charged by the bank's service!

Furthermore, it is important to take the full context of both the card and the loan, when relating the information to your reality and interest when acquiring this credit!

Don't forget that you're the one who pays the TAN and APR! This happens because the interest rate is like the price you are paying to use the service and for keeping the institution's money. In other words, it's the bank's profit!

Furthermore, other issues will influence the amount of interest, in addition to the type of rate. Thus, there is the question of the value of the amount, the term, the type of credit and the price that the institution itself establishes for its services!

It is worth emphasizing that, both in a personal or housing loan, as in a credit card, the TAN and the APR apply!

Therefore, only by understanding the difference and the function of each rate is it possible to make the best decision. This is because this is the only way to see the full value of that service!

So, without further ado, let's see in detail what each of the interest rates is about!

As we have already shown, the APR is the Global Effective Annual Charge Rate and is directly related to the total cost of the loan. In other words, it is the percentage that the customer must pay in relation to the amount obtained.

The APR is calculated by including all mandatory insurance, interest, additional tax expenses, registrations and financial transactions. And it also includes loan commissions and any other type of charge.

On the other hand, the APR does not take into account some fees such as: early repayment commissions; notary costs; amounts payable due to non-compliance by the contracting party (that is, yours).

Now, let's talk about the Nominal Annual Rate, the TAN. It is a simple fee, charged annually on financial transactions. In other words, it is defined only as the interest on any type of monetary loan.

Thus, despite being charged annually, it can be calculated according to the type of loan: semi-annual, annual or even quarterly.

Furthermore, the main definition of the TAN is that it does not have any type of additional tax incorporated, nor other credit charges. So, be careful when comparing loans using just this as a basis!

Therefore, it can be said that the biggest difference between the TAN and the APR are the additional charges and charges to the interest on some type of loan. For this reason, note that in contracts the value of the TAN is lower than the APR.

In other words, always prioritize comparing the APR! This is because, often, a bank's TAN may even be lower. But, when comparing other fees, the total amount may end up being higher!

Therefore, in loan situations with the same term, amount, modality and repayment conditions, the proposal with the lowest APR will be the cheapest for you!

Now that you better understand the difference between TAN and APR, are you ready to find that ideal loan for you? Furthermore, there are platforms that can help you find the best path.

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This is a great way to get rid of your credit debts by negotiating them with other institutions! So, if you want to understand more about how the platform works, you can check out our review!

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