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Which charges belong outside a headline rate comparison?
A disclosure may include specified charges while excluding costs that arise only under particular events.
Locate late-payment, account and early-exit provisions separately from the advertised rate.
Write down the trigger and calculation for each contingent charge. This makes an adverse scenario visible without assuming it will happen or claiming that one annual figure covers every possible bill.
Open the loan comparison guides
Definitions
- Nominal interest rate
- Stated rate used to calculate interest under the agreement; it does not describe every other charge.
- Annual comparison measure
- Annualized disclosure used to compare borrowing costs; its calculation and included charges depend on the jurisdiction and product.