Debt & Credit
Beginner
Interest Rate
💡 In plain English: The price you pay to borrow money — expressed as a percentage per year.
Definition
The percentage of principal charged for borrowing money, or paid on savings/investments, typically expressed annually.
📌 Real-World Example
Home loan at 8.75% p.a.: for every ₹100 borrowed, you pay ₹8.75 in interest per year. RBI's repo rate influences all bank lending rates in India.
Try it yourself
Use the EMI Calculator to see this concept with your own numbers.
Related Terms
APR (Annual Percentage Rate)
The true annual cost of borrowing money, including all fees — more...
EMI (Equated Monthly Instalment)
The fixed monthly payment you make toward a loan — includes both...
Amortization
How a loan gets paid off over time — early EMIs are mostly...
Central Bank / Repo Rate
The interest rate at which the central bank lends to commercial...
⚠️ Educational Content: All definitions and examples on this page are for educational and consultancy reference purposes only. They do not constitute financial, legal, or investment advice. Moneykar is not registered with SEBI, CBUAE, SCA, or any financial regulator. Consult a qualified professional before making financial decisions.