Glossary

Glossary

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This is the institution responsible for formulating and implementing monetary policy for the countries that use the Euro as their common currency. The ECB plays a key role in managing price stability in the Eurozone, monitoring inflation and adjusting the money supply and interest rates. In addition, the ECB also plays an important role in supervising and regulating Eurozone banks, with the aim of maintaining the stability of the financial system. The ECB is an independent institution based in Frankfurt, Germany, and plays a central role in coordinating the monetary policies of the Eurozone countries, promoting a stable currency and a secure financial environment.

Total costs or expenses associated with a loan or credit, in addition to the principal amount that has been borrowed. These costs can include (but are not limited to) interest, fees, administrative fees, insurance and other charges related to the process of obtaining and maintaining the loan. The total charge for a loan is the sum of all these additional expenses.

This is a reference rate widely used in the European financial market and is often used as the basis for calculating interest rates on mortgage loans, personal loans, loans for companies and other financial products. EURIBOR is published daily in various maturities, such as 1 month, 3 months, 6 months and 12 months, to meet the different needs of the financial market. It is important for borrowers to understand how EURIBOR affects their interest rates and the instalments of loans indexed to this rate, as fluctuations in EURIBOR can result in variations in borrowing costs over time.

Financial measure that represents the proportion of a borrower's monthly income that goes towards paying the monthly instalments of a loan or credit. It is expressed as a percentage and is used by lenders to assess a borrower's ability to pay and determine their eligibility for a loan.A high effort rate indicates that a significant part of the borrower's monthly income is being directed towards paying the loan instalments, which can be a sign of financial risk, especially if the rate is higher than a certain limit set by the lender's policies.

Financial measure that represents the real interest rate of a loan or investment after taking into account all associated charges, fees and expenses, as well as the frequency with which interest is capitalised over the term of the loan or investment. The EIR is expressed as an annual percentage and offers a more accurate assessment of the effective cost or real yield of a financial product.