CZY RRSO POZWALA NA WYBÓR NAJTAŃSZEJ OFERTY KREDYTOWEJ?
DOES THE APRC REALLY ALLOW THE BEST (THE CHEAPEST) LOAN OFFER TO BE CHOSEN?

Summary/Abstract: The article questions the informative value of the APRC (Annual Percentage Rate of Charge) – a loan cost indicator calculated in Poland for two decades. It has been implemented from EU legal regulations. The conducted research indicates that the APRC distorts the real cost of the loan borne by the debtor and does not allow the correct comparison of loan offers. Therefore, it is not a good tool for making optimal loan decisions. The APRC (based on the principles of financial mathematics) is always lower for loans whose repayment is more delayed, even though the total amount of costs actually incurred by the debtor is higher. This is the effect of taking into account the borrower’s lost benefit from hypothetically invested amounts of money saved on deferring loan repayment in the APRC value. This is due to the incorrect assumption in the construction of the APRC formula that a loan for a borrower is an investment, as well as the use of incompatible methods reserved for the investment to assess the cost of the loan.

• Details
• Contents