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Updated on
March 16, 2024

Interest rate

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A percentage that represents the cost of borrowing money. It is the amount of interest charged by a lender to a borrower for the use of assets, such as cash or credit. Interest rates can be fixed or variable, and they can vary depending on the type of loan, the creditworthiness of the borrower, and the overall economic climate. For example, a fixed interest rate means that the interest rate will remain the same for the duration of the loan, while a variable interest rate can fluctuate depending on the market. Interest rates on loans like mortgages, car loans, personal loans, and credit card loans are determined by the lender, based on factors such as the borrower's credit score, the loan amount, and the loan term.

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