What is the Annual Percentage Rate of Charge (APR)?

Verified 16 April 2025 - Directorate for Legal and Administrative Information (Prime Minister)

The APR represents the total cost of a credit and takes into account all charges related to the credit. It thus allows consumers to compare different offers on a fair basis, integrating all mandatory costs. The APR is expressed as an annual percentage of the amount borrowed. Here's the information you need to know.

The APR includes interest calculated on the amount borrowed (nominal rate), but also all other costs associated with obtaining the credit. These costs may be related to elements that are necessary conditions for obtaining the credit such as file fees, broker's fees or even compulsory insurance and mandatory guarantees (mortgage, guarantee, etc.).

You can estimate the APR using a simulator:

Do a simulation of the schedule and APR of a mortgage

Although the APR is calculated in the same way for all types of credit, some charges may differ:

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Consumer credit

The costs are more limited and mainly concern the following:

  • Bank interest calculated on actuarial rate
  • File fees (paid to the bank)
  • Fees paid or due to intermediaries (e.g. broker)
  • Cost of compulsory insurance (bank or other company insurance)
  • All other fees charged to you for obtaining the credit (account keeping fees, in case of an obligation to open an account in the bank granting the loan).

Mortgage

The following costs shall be taken into account:

  • Bank interest calculated on actuarial rate
  • File fees (paid to the bank)
  • Fees paid or due to intermediaries involved in granting the loan (e.g. broker).

But this type of credit often includes additional fees, including the following:

  • Cost of Borrower Insurance
  • Guarantee fees (mortgage or surety)
  • Real estate valuation fees (paid to a real estate agent)
  • All other fees charged to you for obtaining the credit (account keeping fees, in case of an obligation to open an account in the bank granting the loan).

FYI  

For a loan that finances the purchase of a home in the future state of completion (Vefa), the intercalary interest shall not be taken into account in the calculation of the APR.

Financial institutions have the legal obligation mention the APR in their advertisements, pre-offers and loan agreements.

This transparency allows the borrower to know the total cost of the loan, thus facilitating the comparison between several offers.

In the absence of a reference to the APR in the contract or in the event of an error in that rate, the borrower may ask the court to waive all or part of the interest payable.

In deciding the amount to be canceled, the court shall take into account, inter alia, the damage suffered by the borrower.

If the judge pronounces this penalty, the contract remains valid for the repayment of the principal, which continues according to the original schedule. On the other hand, interest already paid must be repaid by the creditor or deducted from the amount of capital that remains to be repaid. These sums entitle the borrower to interest at the statutory rate from the date on which they were paid.

APRC cannot be greater than wear rate applicable, i.e. the maximum interest rate legally applicable in France.

It exists different rates of wear depending on your situation: amount borrowed, duration and type of loan, for example.

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