True Loan Cost Simulator
Stop pursuing 'Low Interest'. Input setup fees, taxes, and mandatory insurance to calculate the real Effective Annual Rate.
The Math Behind It
The CET solves the Net Present Value function NPV = Σ (Cashflows / (1 + r)^t) = 0 using Newton-Raphson IRR mapping.If a bank lends you $50k at 1.5%, but immediately deducts $850 for processing, you only walked away with $49,150. However, your monthly interest is still compounding against the $50k. This IRR mapping establishes your final effective loss parameter.
Example
Bank A offers 1.5% with $100 in setup fees. Bank B offers 1.4% with $1,500 in setup fees. The CET algorithm proves that, often, the 'higher' base rate is mathematically cheaper.
Frequently Asked Questions
Custo Efetivo Total (CET) is the Brazilian standardized metric for True Cost of Credit. It aggregates the Annual Percentage Rate (APR) alongside all origination fees, appraisal costs, and embedded governmental taxes (IOF).