What Is the Annual Cost Rate?
Definition
Annual Cost Rate: The total cost of a consumer loan, with interest, taxes and fees, as a yearly percentage of the loan amount. Also called the annual percentage rate (APR); use it to compare loans.
The annual cost rate shows the total cost of a consumer loan as a yearly percentage of the loan amount. Besides interest it includes the other amounts paid for the loan, such as taxes and file fees. So two loans with the same interest rate can have different annual cost rates. Use it to compare loan offers.
Where it appears in the formulas
It is the yearly rate at which all payments, discounted to the loan date, add up to the loan amount: loan amount = Σ payment_k / (1 + ACR)^(t_k), with t_k the time of payment k in years. The loan calculator does not compute it: it finds the installment from interest and the taxes on it and leaves fees out.
In Türkiye
The annual cost rate (yıllık maliyet oranı) is Türkiye’s counterpart of the annual percentage rate (APR). Besides interest it includes KKDF, BSMV and file fees. The Consumer Credit Contracts Regulation, under Law no. 6502 on Consumer Protection, defines it. The loan calculator finds the installment from interest, KKDF and BSMV and leaves fees out.