Interest rate

An interest rate is the percentage charged or paid for the use of money over a period, usually quoted as a yearly figure. It may be fixed, staying the same for a set period, or variable, moving with the wider market.

The rate alone does not reveal the full cost of borrowing, because fees and how often interest is applied also matter. That is why the broader measures known as APR and APY exist, and why comparing headline rates can be misleading.