By Charlotte GAUCHON
22 March 2025
Understanding the components of the Annual Percentage Rate (APR) is essential for any borrower. This rate, which is used to compare the actual cost of loans, includes much more than just interest. Some fees are always included, while others are excluded. These distinctions can have significant financial and legal consequences. Elements included in the APR Interest and fees related to the credit transaction The APR primarily includes the interest on the loan, including interest during the pre-financing period. Article L.314-1 of the French Consumer Code specifies that all «direct or indirect» costs associated with the granting of credit must be taken into account. The following are therefore included in the calculation: Application fees Registration fees Commissions received by the lender Fees for drafting notarial deeds Remuneration paid to intermediaries involved in granting the loan Case law has confirmed this position. The Court of Cassation, in...
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