Vertailukorko

Vertailukorko is a Finnish term that translates to "comparison rate" in English. It is a standardized measure used to express the total cost of a loan, including not only the nominal interest rate but also various associated fees and charges. The purpose of the vertailukorko is to provide consumers with a clearer and more comparable overview of different loan offers, making it easier to understand the true cost of borrowing.

Finnish law mandates that lenders must disclose the vertailukorko for consumer credit products, such as mortgages, personal loans, and car loans. This figure is calculated based on a set formula that includes the interest rate, arrangement fees, account management fees, and any other mandatory costs associated with the loan. By standardizing the calculation, the vertailukorko aims to prevent misleading advertising and empower consumers to make informed financial decisions.

When comparing loan options, consumers should pay close attention to the vertailukorko. A loan with a lower nominal interest rate might not necessarily be cheaper if it has higher associated fees. Conversely, a loan with a slightly higher nominal interest rate but lower fees could prove to be more cost-effective when considering the overall expense. Therefore, the vertailukorko serves as a crucial tool for transparent and fair competition in the Finnish credit market.