EIR (Effective Interest Rate)
The truer yearly cost to compare across loan offers.
EIR expresses the payment stream on a reducing-balance basis. A 3% flat car quote can be around 5% EIR; a 6% flat personal loan can be around 11% EIR.
Why it matters
Two providers can advertise similar flat rates but produce different true costs.
Quick tip
Choose the offer with the clearest EIR, fees and product disclosure sheet.