Nominal interest rate and APRC – how do they differ?

When applying for a loan or credit, the client will sooner or later get familiar with the concepts of nominal interest rate and APRC. Both values, listed above all in the contracts signed, is very important information for the borrower. Most Poles do not yet realize that the nominal interest rate is not the same as the APRC.

It is known for a long time that most financial institutions

Carefully camouflage actual costs – only to encourage the customer to take advantage of the loan. When taking a loan, we should also be interested in how much we will have to pay for the loan next to the amount requested and the loan period. The loan price is determined by two values ​​- nominal interest rate and real interest rate.

  • APRC – the Actual Annual Interest Rate, which expresses the percentage, total cost of credit against the sum borrowed by the customer;
  • The second concept is RSO – i.e. the Annual Interest Rate or the nominal interest rate being one of the costs included in the APRC.

Knowing how these two interest rates differ significantly makes it easier to make a loan decision.

Nominal interest rate

Nominal interest rate

Many people who take out a loan or credit wonder how it is that an offer that had virtually no cost – brings a lot of additional fees. People who are looking for financial support should pay attention to the interest rate for a given product.

By sticking to the definition, nominal interest is the value by which the bank (or loan company) calculates the amount of interest. It is worth noting that the nominal interest rate may not exceed four times the applicable Good Finance loan rate of the National Bank of Poland. Sometimes nominal interest is deliberately given as the first before real by banks, thus being a lure for customers.

Of course, the lower the interest rate, the better, because then the cost of credit will be lower for us. However, this does not mean that a low-interest offer will be the most advantageous for us. It may happen that a given installment loan with a tempting, low-interest rate will be more expensive for us because the lender will apply other, higher costs.

APRC and nominal interest rate


Everyone who is interested in taking out a loan or borrowing should know the basic difference between the APRC and the nominal interest rate. Without this, we will not understand how much it will cost us to use the bank’s credit services.

The abbreviation APRC indicates the actual annual interest rate. In short, the APRC is the sum of all loan costs. It also includes nominal interest. Importantly, the APRC is given in percentage terms. If we want to compare the two indicators, then first of all – the APRC is a more capacious indicator. Secondly, it is an indicator containing more and more important information for the client. The APRC includes:

What’s more interesting – not always lower APRC means cheaper credit. When choosing the right loan, you should pay special attention to:

  • installments – i.e. the burden resulting from the commitment;
  • On the APRC;
  • at the total cost of the loan – which every bank will give us in response to our inquiry. In this category, we include Nominal interest rate on the loan, commissions, preparation fee, all administrative costs and possible costs of loan insurance.

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