The effective Annual Percentage Rate (APR) reflects the actual annual return you can earn on an investment, taking into account not only the nominal interest rate but also factors like the loan term, fees, and how often interest payments are made.
On Mintos, the effective APR can be influenced by:
- Loan duration – Shorter-term loans with frequent repayments may result in a higher effective APR compared to longer-term loans with the same nominal rate.
- Discounts or premiums on the Secondary Market – Buying at a discount increases the effective APR, while buying at a premium lowers it.
- Early repayments – If a borrower repays a loan earlier than scheduled, it can impact the final return, and therefore the effective APR.
- Fees – Any applicable fees, such as those on Secondary Market transactions, are also reflected in the effective APR.
The effective APR gives you a more accurate picture of your potential return than the nominal interest rate alone.