Interest Rates

A rate which is charged or paid for the use of money.

For example, a home owner must pay interest rates on a loan they borrowed from the bank. If they borrowed $400,000, then they will be required to pay back $400,000 plus any interest rates that have occurred.

Interest rates are generally a percentage that is charged to the overall amount. Charges can be daily, weekly, annually, or whatever the parties decide. People with bad credit scores will ultimately have to pay higher interest rates.