To limit the cost of credit, the Government is using the APR (Annual Percentage Rate) as a reference, as this indicator reflects the final price paid by the customer, including all expenses associated with the loan. The APR offered by financial institutions may not exceed a specific maximum level, which will be set based on the average consumer credit rate published by the Bank of Spain, plus a margin depending on the loan amount.
According to the text of the regulation, this margin is 15 percentage points for loans up to €1,500; 10 points for those between €1,500 and €6,000; and 6 points for loans exceeding €6,000. These caps will be updated and published on a quarterly basis.
Currently, the average interest rate for consumer credit published by the Bank of Spain stands at around 7%. For consumers requesting a loan of up to €1,500, the rate applied by the bank may not exceed an APR (Annual Percentage Rate) of 22% (7% plus a 15-point margin). If a loan between €1,500 and €6,000 is requested, the limit would be 17%. For loans exceeding that amount, the cap would be around 15%.
Regardless, until the royal decree specifying these brackets comes into effect, the law establishes a transitional maximum limit of 22% for new operations. This cap will also apply to the interest settlement of existing revolving credit cards, one of the most controversial products due to their high interest rates.
