Calculate how much effective interest a quick loan has. Fill in the amount of the loan, the total cost of the loan (including interest and application fee) and about how long the money must be repaid.
Effective interest is a way of comparing loans with different terms. It takes into account the interest-on-interest effect, which simple interest does not. There is a big difference when the repayment period is shorter than one year.
The formula used to calculate the effective interest rate is set out in the European Parliament Directive on consumer credit agreements (from 23 April 2008; Link to PDF ).