Also called: AAPR
Comparison rate
A comparison rate is a single percentage that combines the interest rate with most standard fees and charges on a consumer loan, calculated on a prescribed example amount and term. It is required for credit regulated by the NCCP Act so borrowers can compare loans consistently.
What is a comparison rate?
A comparison rate is a single percentage that combines the interest rate with most standard fees and charges on a consumer loan, calculated on a prescribed example amount and term. It is required for credit regulated by the NCCP Act so borrowers can compare loans consistently.
Example
A car loan advertised at 7.49% with a $500 establishment fee and monthly fees might show a comparison rate near 8.60%.
Why it matters
It exposes loans where a low headline rate hides large fees, but it will not match your exact loan because the example amount is fixed.