Do You Have A Clear Idea Of Interest Rate

It is very important nowadays to clearly know about what is interest rate since today you will find an element of interest rate in everything.  Whenever you acquire a loan from the borrower he always charges a certain percentage of the interest rate on the money borrowed by you. This money earned by them through the interest rate is the way how they earn income when the money is given to the lender.
Do You Have A Clear Idea Of Interest Rate
Interest rate is the amount paid by the borrower oven and above the money loaned by the lender for the risk involved in the money lend to you. You may repay the loaned amount in a lump sum or in an easy installment as decided between the parties. If any default is made by the borrower then a certain penalties with or without interest is charges by the lender.
There are different types of interest rates. One of the type is the fixed interest rate where the rate has been decided between the parties at the time of entering into the contract and the rate does not changes and stays constant throughout the lending period. Say for an example if the borrower borrows money for a three year period to be paid in a 120 installments and the interest rate is initially 2 % on such borrowed money then this interest rate of 2% will stay as it is till the last installments and will not change.
Another type is the adjustable interest rate. Here the interest rate changes after a certain period of time. The time depends upon the policies of the lender and different lender may have their own sets of rules and regulations to be followed. So it’s advisable to get the proper knowledge of the interests rates which keeps on changing everyday .