Debt Dictionary


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Interest is the fee that creditor charges for lending money to the borrower. The interest rate on the loan depends on several factors including the credit worthiness (credit score) of the borrower and the prime interest rate. The interest is presented as yearly percentage of the loan principal for example if you borrow $1,000 and you pay interest fees of $70 per year than the interest rate of your loan is 7% per year.

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