By Charlotte GAUCHON
17 June 2025
A bank loan contract is rarely a smooth ride. Behind the main clauses sometimes lie complex calculation mechanisms, the impact of which on the total cost of credit is often underestimated by the borrower. Anatocism, value dates, lombard year: these technical terms refer to banking practices, some legitimate, some questionable, that can significantly increase the financial burden. Understanding how they work is an essential first step for any private individual or company director wishing to ensure that their commitments are accurate. These practices are at the heart of the lender's remuneration and deserve careful analysis. Anatocism: capitalisation of interest and its conditions Anatocism, or capitalisation of interest, is a mechanism whereby interest due on a capital sum is itself incorporated into that capital sum to produce new interest. In other words, interest in turn generates interest. This practice, if...
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