ING's Orange Loan: from 5.75% to 12.34% APR in its simulator

ING's Orange Loan: from 5.75% to 12.34% APR overnight

ING's Orange Loan appeared in its own simulator at 12.34% APR, according to the user who started the thread. The day before it showed 5.75%, the same rate it had held steady for months. And the next day, the figure vanished: the configurator went back to offering an interest rate below 6% and the previous offer disappeared without explanation. If the data held, the product would be far above any reasonable usury threshold. There were screenshots.

For years that loan moved in a comfortable range: 3.82% APR at its best, 5.75% as a stable reference rate. Jumping to 12.34% is not a gradual adjustment, it is doubling the price of money on a single screen. And it happens in a context where the same bank's savings products still pay peanuts.

How much has ING's Orange Loan risen?

The jump is documented with screenshots from different dates. One from 3 January 2022, with the rate far below the current one. Another from 2 June 2023, which already shows a tranche contracted for an additional €17,000. In between, the interest rate climbed to the 12.34% that sparked astonishment.

There is a detail that fuels suspicion: the offer appeared and disappeared from the configurator without explanation. Another user who simulated €20,000 declaring monthly income of €10,000 also received a 12% APR. What solvency guarantee is someone who claims to earn that per month missing? The question was left hanging.

Hence the interpretation of the user who started the thread: banks are finally passing on rate hikes to consumer credit, not just mortgages.

Why does 12.34% border on usury?

In the debate, the Civil Procedure Act is cited to argue that the maximum permitted rate in Spain is 8.25%. Any interest above that figure enters murky territory.

By that yardstick, an APR of 12.34% is not just expensive: it is above the limit that the discussion itself treats as the legal boundary. The calculation circulating is blunt: €20,000 borrowed that returns €6,000 in interest over 5 years, 30% of the principal. On paper, a personal loan can end up costing considerably more than the money received.

And here comes the usual irony: the same system that declares usury illegal offers products that skirt it without batting an eyelid.

Deposits remain at 1%: the other side of the business

While money leaving the bank becomes more expensive at 12%, money coming in barely earns anything. The Orange Account pays 1.25% and conventional deposits stay around 1.3%. Someone summed it up wryly: the bank lends at 12% the money its customers leave for 1%.

The gap is the business. The margin between what they pay to attract savings and what they charge to lend it is wide. And the reading that rate hikes are finally being passed on to credit leaves out the other half of the equation: the equivalent rise in liabilities does not appear.

There are exceptions cited as ammunition: Wise offered 4.13% for idle cash and MyInvestor 2% with no conditions. Little, insufficient, but at least it is movement. Against that, the traditional interest-bearing account remains at the starting line.

From 17% in the eighties to 12% today

The historical comparison remains uncomfortable. It is recalled that in the eighties mortgages were paid at 17%. Seen that way, 12% seems a relief. But the parallel breaks down as soon as you look at the other side: back then money lost value at a forced pace, inflation ran rampant and wages were revalued with annual double-digit increases that no one imagines today. A 17% rate under those rules of the game is not the same as 12% with frozen wages.

Another current points to the end of an anomaly: free money for a decade. The price of credit was so artificially low that it allowed financing purchases that were not needed. That it now becomes more expensive is interpreted as a return to the real economy, although those who defend it rarely need to borrow.

The most repeated advice is the usual: if it can be avoided, do not go into debt. The anecdote that sums up the idea is that of the person who walked through the Athens market not for what he saw, but for all that he discovered he did not need.

What changes for those taking out a consumer loan today

The terms of the personal loan depend on each client's simulation: declared income, history and profile. The 12.34% is not a single rate, but the result of the configurator for a specific case. But the overall picture is the same: quick credit has become more expensive and savings still do not reward.

The sarracena that hovers over everything is uncomfortable: those who have the money and those who need it are two different people, and the system lives on the spread.

With these figures, the temptation to use financing to buy a car or a phone should have vanished. Does someone who simulates income of €10,000 a month really sign a personal loan at 12.34%?