CET: the cost the ad does not show

If the face value is R$10,000 but fees and IOF are taken immediately, you financed one number and received another. CET exists to fold that gap into one annual rate.

CMN Resolution 4.881/2020, in force since 1 February 2021, defines CET as a rate that consolidates, on the calculation date, the charges and expenses of the operation: amortisation, interest, fees, taxes, insurance and other costs tied to the contract, including third-party services hired by the lender, even when they are not included in the credit amount. It must be expressed as an annual percentage rate and disclosed before signing, with the calculation statement.

In practice, what you receive on day zero (the credit minus costs paid up front) is compared with every future payment. The rate that equates both sides is the CET. CalculaBR uses monthly periods; lenders use calendar days, so the second decimal may differ.

• CMN Resolution 4.881/2020 (Central Bank, Portuguese)
• Consumer Defence Code, article 52 (Planalto, Portuguese)

A R$10,000.00 loan at 2% a month over 24 instalments has an instalment of R$528.71 and a total paid of R$12,689.04, meaning R$2,689.04 of interest. With no extra charges, CET is about 26.82% a year, the same as the effective annual rate of 2% a month.

Now imagine the same contract with R$250.00 in fees and R$150.00 in insurance deducted at release. You receive R$9,600.00 but still pay 24 instalments of R$528.71. CET rises to about 2.36% a month, or 32.36% a year: more than five percentage points above the sticker rate, with the same advertised interest.

Multiplying the monthly rate by 12 understates the cost: 2% a month is not 24% a year but 26.82% a year, because of compounding. Comparing only the instalment also misleads, since different terms change the total paid. Another mistake is ignoring insurance and fees financed inside the contract, which enter CET even when they raise the debt. Always ask for the statement showing CET before signing.