The annual equivalent cost (carga anual equivalente, CAE) is a percentage that sums up the total cost of a loan over a year: besides the interest rate, it includes insurance, stamp tax, fees and any other charge the borrower pays. It has been mandatory in Chile since Law 20,555 (the Sernac Financiero law) for consumer loans, mortgages and credit cards, and it serves one purpose: comparison. Between two loans for the same amount and term, the one with the lower CAE is cheaper. The differences are large: for a CLP 7,000,000 loan over 48 months with credit life insurance, the CAE ranges from 16.49% at Bice to 35.34% at Caja Los Héroes, according to Sernac, Consumer Loan Comparator, update of November 8, 2026.
View the data as a table
| Lowest CAE (Bice) | 16.49% |
| Highest CAE (Caja Los Héroes) | 35.34% |
| Lowest total cost | CLP 9,607,440 |
| Total cost gap | CLP 3,555,264 |
What the CAE (annual equivalent cost) is
The interest rate tells you how much the bank charges to lend you the money; the CAE tells you how much the loan really costs, all in, expressed as an annual rate. That is why the CAE is always equal to or higher than the rate: if a loan has no insurance or fees, both match; if it does, the CAE goes up. The regulations define it as the indicator that, expressed as a percentage, reveals the cost of a loan over a year, whatever the agreed term, and includes the interest rate, all associated charges and the term of the transaction, according to the definition published by Suseso.
- Interest rate: the price of money, usually stated as a monthly rate on consumer loans.
- Associated insurance: credit life, unemployment or others, if bought with the loan.
- Stamp tax and notary fees.
- Fees for origination, administration or maintenance.
How the CAE is calculated: a verified example
The calculation has two steps. First you find the monthly rate that equates the money you receive with the present value of all the installments you pay (the loan's internal rate of return). Then that rate is converted to an annual basis. We tested the method with a real case from Sernac's comparator: Bice reports a CLP 7,000,000 loan in 48 installments of CLP 193,138, without credit life insurance, with a CAE of 14.53%. The monthly rate that equates the CLP 7,000,000 with those 48 installments is 1.2105%; multiplied by 12 it gives 14.53%, exactly the reported CAE. We repeated the calculation with other cases in the comparator and the match holds: the reported CAEs equal the monthly internal rate multiplied by 12.
On that same loan the agreed interest rate is 1.15% a month. The difference from the internal rate (1.2105%) corresponds to charges added to the installments, such as stamp tax. If credit life insurance is added, the installment rises and Bice's CAE goes to 16.49%. An example with a bank's official figures: Scotiabank publishes that a CLP 10,000,000 loan over 48 months at 1.35% a month has a CAE of 18.77% and a total cost of CLP 14,492,560; at 2.5%, the CAE rises to 32.85% and the total cost to CLP 18,515,963 (Scotiabank Chile, consumer loan simulation, examples as of November 4, 2026).
| Step | Example figure (Bice, no credit life insurance) |
|---|---|
| Amount requested | CLP 7,000,000 |
| Term | 48 monthly installments |
| Installment | CLP 193,138 |
| Agreed interest rate | 1.15% a month |
| Monthly internal rate (our calculation) | 1.2105% |
| CAE = internal rate × 12 | 14.53% |
| CAE reported to Sernac | 14.53% |
| Total cost of the loan | CLP 9,270,624 |
Source: Sernac, Consumer Loan Comparator, update of November 8, 2026; internal rate calculation by Pauta Financiera.
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Sernac's consumer loan comparator shows, for fixed amounts and terms, the installment, rate, CAE and total cost each lender reports. For CLP 7,000,000 over 48 months with credit life insurance, the installment ranges from CLP 200,155 to CLP 287,694 and the total cost from CLP 9,607,440 to CLP 13,809,313: choosing the most expensive option costs more than CLP 4,201,873 extra. The data are updated to November 8, 2026 and may vary depending on each customer's profile. How to use these data to choose is in how to compare consumer loans by rate and CAE.
| Bice | 1.15% | $200,155 | 16.49% | $9,607,440 |
| Scotiabank | 1.39% | $210,350 | 19.28% | $10,096,800 |
| Banco Internacional | 1.55% | $217,845 | 21.22% | $10,456,520 |
| Capual | 1.72% | $222,495 | 20.64% | $10,679,760 |
| Santander | 1.64% | $224,307 | 22.98% | $10,766,704 |
| Bci | 1.77% | $229,368 | 24.30% | $11,009,688 |
| Oriencoop | 1.66% | $233,425 | 25.34% | $11,204,400 |
| Banco Falabella | 2.06% | $240,986 | 28.16% | $11,567,328 |
| Banco Consorcio | 2.00% | $243,251 | 27.82% | $11,676,048 |
| Coopeuch | 2.17% | $244,024 | 28.01% | $11,713,152 |
| Ahorrocoop | 1.98% | $246,969 | 28.75% | $11,854,512 |
| Caja Los Andes | 2.10% | $251,332 | 28.39% | $12,063,936 |
| BancoEstado | 2.24% | $251,897 | 27.21% | $12,091,023 |
| Caja 18 de Septiembre | 2.49% | $270,073 | 34.35% | $12,963,504 |
| Caja Los Héroes | 2.54% | $274,223 | 35.34% | $13,162,704 |
| Caja La Araucana | 2.56% | $278,867 | No data | $13,385,552 |
| Banco de Chile | 2.79% | $287,694 | 34.74% | $13,809,313 |
View the data as a table
| Monthly interest rate | CAE | |
|---|---|---|
| Bice | 1% | 16% |
| Scotiabank | 1% | 19% |
| Banco Internacional | 2% | 21% |
| Capual | 2% | 21% |
| Santander | 2% | 23% |
| Bci | 2% | 24% |
| Oriencoop | 2% | 25% |
| Banco Falabella | 2% | 28% |
| Banco Consorcio | 2% | 28% |
| Coopeuch | 2% | 28% |
| Ahorrocoop | 2% | 29% |
| Caja Los Andes | 2% | 28% |
| BancoEstado | 2% | 27% |
| Caja 18 de Septiembre | 2% | 34% |
| Caja Los Héroes | 3% | 35% |
| Banco de Chile | 3% | 35% |
How much credit life insurance adds
Credit life insurance pays off the debt if the borrower dies, and on consumer loans it is usually optional. Its effect shows when comparing the same loan with and without insurance: at Bice the CAE goes from 14.53% to 16.49%, and at Banco de Chile from 32.82% to 34.74%. How much that insurance costs by bank and when it is mandatory is explained in what credit life insurance is.
The CAE cannot exceed legal limits on the interest component: the maximum conventional rate sets the ceiling on the rate, and the CAE adds the other costs. Both are explained in the guide to the maximum conventional rate.
How to compare loans with this indicator
- Compare the CAE only between loans of the same amount and term. The CAE of a 12-month loan is not comparable with that of a 60-month one.
- Also look at the total cost of the loan (CTC): it is the sum in pesos of everything you will pay.
- Ask for the summary sheet: by law, each offer must show the CAE and total cost on the first page.
- Check which insurance is included and whether it is mandatory or optional; removing it lowers the CAE.
This information is journalistic and educational, not financial advice. Check the conditions and the total cost (CAE) with the institution before signing up.
Frequently asked questions about the CAE
What does CAE mean on a loan?
Carga anual equivalente (annual equivalent cost): the total cost of the loan expressed as an annual percentage, including interest, insurance, taxes and fees.
Is a high or low CAE better?
Low. For the same amount and term, the loan with the lower CAE is cheaper.
Why is the CAE higher than the interest rate?
Because it adds insurance, taxes and fees, and because consumer loan rates are usually stated monthly while the CAE is annual.
Is the CAE the same as the university CAE?
No. The higher education CAE is the Crédito con Aval del Estado, a state-guaranteed student loan; the CAE in this article is a cost indicator. For the student loan, see how much it costs to study at university.
