Effective interest rate
What a loan costs per year, with every fee included. It is the rate you can compare between lenders.
Short answer
The effective rate (effektiv ränta) is the total cost of the loan converted to a yearly percentage, with the setup fee, notice fees and interest on interest included.
Updated 12 October 2026
Same rate, different total cost
| Loan | Fees | Effective rate | Per month | Total |
|---|---|---|---|---|
| SEK 100,000, 5 years, 8.90% | No fees | 9.27% | SEK 2,071 | SEK 124,259 |
| SEK 100,000, 5 years, 8.90% | Setup fee SEK 500, notice fee SEK 25/month | 10.06% | SEK 2,096 | SEK 126,259 |
| SEK 100,000, 5 years, 8.90% | Setup fee SEK 1,500, notice fee SEK 45/month | 10.99% | SEK 2,116 | SEK 128,459 |
| SEK 10,000, 1 year, 22.00% | Setup fee SEK 588, notice fee SEK 57/month | 56.27% | SEK 993 | SEK 12,503 |
Small loans are affected most: the same fees weigh more when the amount is small.
How the effective interest rate is worked out
The effective rate is the interest rate that makes the present value of all your payments equal the amount you received. There is no closed formula; it is solved numerically.
In the comparison we work out the effective rate again for the amount and term you choose, because the lender's advertised figure often applies to a different amount and term. The guide to the effective and nominal rate shows the difference in kronor, and the method is on the how we compare page.
Common questions about the effective rate
What is the difference from the nominal rate?
The nominal rate is the interest rate itself. The effective rate also includes the fees and the fact that interest is added every month, converted to a yearly rate.
Is the effective rate the same as APR?
It is the Swedish equivalent. The effective rate (effektiv ränta) is calculated from all payments, fees included, as a yearly rate, which is what APR means in English.
Why is the effective rate so high on quick loans?
The fees are charged on a small amount over a short time. A setup fee of SEK 588 is almost six per cent of a SEK 10,000 loan, and it is paid over one year instead of five. That is why many quick loans end up above 32%, the line for high-cost credit.
Does the calculator work out the effective rate?
Yes. The loan calculator works out the effective rate with the fees you enter, the same way lenders do.
Must the lender show the effective rate?
Yes. Anyone who markets credit with an interest rate must also show the effective rate in a representative example, under the Swedish Consumer Credit Act.
Does the rate cap apply to the effective rate?
No. The rate cap applies to the nominal rate, 22% today. The effective rate may be higher, because the fees count. There is a cost cap instead: the total credit costs may never exceed what you borrowed.