Interest is the amount of money, calculated by a percentage that you need to pay a lender on top of the original loan for the privilege of using their money.
The interest you pay on your loan is usually calculated annually. However, there are circumstances such as short term bridging finance where the interest term may be lower.
To work out the interest on a loan, you need to know three vital details. You will need to work out how much you want to borrow, how long you want to borrow it for, and the interest rate the lender has given you.
You can then use our interest calculator to give you an idea of how much money you will be paying in interest to borrow the desired amount.
There are a few different types of interest. These are:
- Fixed Interest Rate
- Variable Interest Rate
- Annual Percentage Rate (APR)
- Simple Interest Rate
- Compound Interest or Rolled-Up Interest Rates
- Deferred interest