TAE (Tasa Anual Equivalente)

TAE is Spain's legally mandated annualized cost figure for consumer credit, required under Ley 16/2011 (transposing EU Directive 2008/48/EC). It folds interest plus mandatory fees into one comparable percentage.

For short microloans, TAE can look extremely high once annualized, even when the absolute euro cost is modest — this is a mathematical property of annualizing short-duration credit, not necessarily evidence of predatory pricing. Always compare the total euros repayable for your specific loan size and term alongside the TAE.