Loan Calculator - TAN, TAEG and Monthly Interest
Calculate your monthly instalment, TAEG and total loan cost. French depreciation formula according to CCD2 (D.Lgs. 212/2025).
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Frequently Asked Questions
What is the difference between TAN and TAEG?
Annual Nominal Interest Rate measures only interest on capital, excluding additional fees. The Annual Effective Global Rate incorporates all credit costs - interest, documentation fees, mandatory insurance premiums - making different offers comparable. Directive CCD2 (D.Lgs. 212/2025) requires banks to report both.
How is monthly premium calculated with French depreciation?
Con the French amortization (constant annuity), the monthly payment is equal for the entire loan term. It's calculated as: rate = P × i / (1 − (1+i)^−n), where P is the principal, i = TAN/12 the monthly interest rate and n the number of months. In the first payments, the interest portion is greater; gradually the capital portion increases.
What is the CCD2 directive and how does it affect consumer credit in Italy?
Consumer Credit Directive 2023/2225/UE (effective in Italy as of 10 January 2026), implemented by D.Lgs. 212/2025, strengthens consumer credit transparency: TAEG obligation on contracts and advertising, right to terminate within 14 days, stricter merit-based credit evaluation, and harmonized standards for early repayment.
How to reduce total loan interest?
Three main strategies: (1) negotiate a lower TAN by comparing multiple offers using TAEG as the benchmark; (2) reduce duration - higher rates but lower total interest; (3) minimize accessory costs (documentation, optional insurance). Our TAEG calculator allows you to simulate all three scenarios in just seconds.
Is the TAEG calculation exact or indicative?
The calculation is mathematically exact (Newton-Raphson method with a tolerance of 1e-7, in accordance with Annex 5C Circular 217/2012 of the Bank of Italy). The results are indicative for financing decisions: the definitive TAEG of the bank offer may include additional fees not included here. For binding contracts, always refer to the pre-contractual information document (SECCI).
How is it used?
- Insert loan amount
Indicate the amount you intend to fund, for example 10,000 €.
- Set TAN and duration
Insert Annual Nominal Rate (TAN) offered by the bank and duration in months (e.g., 60 months = 5 years).
- Add any additional expenses
If the contract includes training costs or initial fees, include them to get a precise TAEG.
- Read Results
Get monthly payment, actual loan cost (TAEG), total repayment amount and overall interest.
How does a loan repayment calculator with TAEG work?
Calculator for loan repayment estimates monthly payment, TAEG (Effective Annual Global Rate), and total financing cost using the methodology of Annex 5C of Circular 217/2012 by Bank of Italy, updated with the receipt of CCD2 directive (D.Lgs. 212/2025).
Monthly interest is calculated using the French amortization plan (constant annuity): the borrower pays the same fixed amount, composed of decreasing interest and increasing principal. This method is most commonly used in Italy for personal loans, installment loans, and fixed-rate mortgages.
The TAEG includes all mandatory contract costs of the loan, including investigation fees, substitute tax, and any other charges. Unlike the TAN, the TAEG allows for transparent comparison between different offers - which is why the CCD2 requires banks to display it on every advertising document and pre-contract agreement.
All calculations occur in the browser: no data is sent to external servers. The tool is for informational purposes only; for binding contracts, always refer to the standardized pre-contract document (SECCI) provided by your financial intermediary.
Practical example: loan of $10,000 at 8% interest for 60 months
- Amount: $10,000, Tax: 8%, Term: 60 months, Expenses: $0
- Monthly interest rate i = 8%/12 = 0.6667%
- Rent per month: approximately €202.76
- Total to be returned = 202.76 x 60 = 12.16 €
- Total interest = 12.165.60 - 10.000 = 2.165.60 €
- No additional fees - approximately 8.30% monthly capitalization
Vocabulary Dictionary
- Tan or Tanning
- Annual Nominal Rate: measures only interest costs on financed capital, excluding additional contract expenses.
- Tag or Label
- Annual Effective Global Rate: indicates the total cost of credit, including interest and all mandatory fees. It is the prescribed indicator by the CCD2 directive to compare different offers.
- French depreciation
- Fixed repayment plan: the monthly payment remains constant throughout; at the beginning, interest is predominant, while capital grows over time.
- Keep it brief
- EU Directive 2023/2225 on consumer credit, implemented in Italy with D.Lgs. 212/2025 effective from January 10, 2026. Enhances transparency, right to withdraw and standards for creditworthiness assessment.
- Section
- Standard European Consumer Credit Information: the standardized pre-contract document that banks must provide before signing, containing TAEG, interest rate and repayment plan.
- Training expenses
- Costs charged by the bank for assessing the financing practice. Included in the calculation of TAEG as part of the total credit cost.
Do you need a custom analysis?
This tool is free and informative. For in-depth analysis with AI on-prem - private data, zero cloud - contact Federico.