Total Repayment Amount (TRA)

The TRA is an acronym that means Total Repayment Amount that is charged to the consumer. It corresponds to the total amount that the consumer will pay to the credit institution during the loan period. This is the sum of all interests, loan charges including commissions, taxes and other charges such as processing commissions.

Example:

Loan Amount: 24.000 €
Term: 5 years or 60 months
Interest rate 10%
Formalization Commission €150 + Stamp duty (4%)
Monthly Processing Commission €1 + Stamp duty (4%)

The TRA will be €31,874.10 that results from the sum of the interest (€7,655.70), the formalization commission (€156) and the processing commissions (€62.40). This means that the consumer will disburse the total of €7,874.10 costs related to the credit.

Why is TRA important?

It becomes relevant to the consumer because it allows to compare proposals independent of the loan term and interest rate. The consumer should opt for the proposal whose TRP is inferior.

The TRA should be clearly indicated in the credit proposal (standard information sheet). It should also be indicated in advertising campaigns.

2 Comments on "Total Repayment Amount (TRA)"

  1. João Seixas | 16/06/2019 at 16:56 | Reply

    Muito obrigado Eduardo pelo esclarecimento! Foi uma excelente ajuda. Significa que o spread do empréstimo não interessa para comparar propostas?

    • O spread é uma componente da T.A.N. Para saber mais ver o artigo sobre o spread. É uma forma de comparar as diferentes propostas de empréstimos mas é insuficiente. Uma determinada instituição pode ter um spread mais competitivo mas poderá não ser a escolha mais acertada, pois existem outros custos tais como seguros e comissões. Será mais acertado utilizar a TAEG (Taxa Anual de Encargos). A TAEG inclui todos os custos e deverá ser escolhido o emprestimo que apresente a TAEG mais baixa!

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