Periodic interest rate

Periodic interest rate.

The periodic interest rate, sometimes called the nominal rate, is the interest rate a lender charges on the amount you borrow.

Lenders are also required to tell you what a loan will actually cost per year, expressed as an annual percentage rate (APR).

The APR combines any fees the lender may charge with a year of interest charges to give you the true annual interest rate. That allows you to compare loans on equal terms.

For example, suppose you take a $10,000 loan at 10% interest. You pay an origination fee of $350, so you actually borrow $9,650. Since you are getting a smaller loan, but repaying the full $10,000 with interest, the APR is closer to 10.35%.

The periodic rate is also the interest rate a bank or other financial institution pays on amounts you deposit. If you're earning compound interest, the periodic rate will be lower than the annual percentage yield (APY).

References in periodicals archive ?
Adjusted net interest income is interest income less interest expense (or "GAAP net interest income"), less other periodic interest rate swap interest costs reported in other income (loss), net.
Macquarie Mortgage Choice combines a home equity line of credit (HELOC) with an interest-only (first 10 years), variable rate loan with initial periodic interest rate cap options that offers both flexibility and security against rate increases, plus the potential to benefit from rate decreases.
In addition, American Capital reiterates that realized gains in the fourth quarter are anticipated to cover net realized losses of $54 million in the first three quarters of 2004, excluding periodic interest rate swap settlements.
Besides crowding out private sector borrowing, the large fiscal dissavings are monetized through institutional arrangements with the central bank, which make the disinflation target difficult to achieve and cause periodic interest rate volatility.
05 of adjustable-rate loans subject to semi-annual adjustments based on a LIBOR index with 1 percent periodic interest rate caps.
Treasury securities adjusted to a constant maturity of one year, are subject to minimum and maximum lifetime interest rates as well as periodic interest rate caps and floors.
Fund management pursues this strategy by investing, under normal circumstances, at least 65% of the fund's assets in adjustable-rate mortgages (ARMs) and other securities representing an interest in or collateralized by mortgages with periodic interest rate resets.
During periods of rapidly rising interest rates, such as has recently occurred, the initial impact on the Company's earnings is a temporary decrease in net interest income because the Company's assets have periodic interest rate caps which limit the amount of adjustment on any repricing date whereas the Company's borrowings do not have similar caps.
The 629 loans, indexed to the six-month London Interbank Offered Rate (LIBOR), are subject to minimum and maximum lifetime interest rate caps as well as periodic interest rate caps.
The 961 loans, indexed to the six-month London Interbank Offered Rate (LIBOR), are subject to minimum and maximum lifetime interest rate caps as well as periodic interest rate caps.
This was partially offset by a decrease in the company's interest rate spread as rates paid on savings deposits remained relatively flat during the second quarter of 1993, while mortgage loan rates on existing loans adjusted downward due to the periodic interest rate adjustment feature of the loans.
The equity participation securities do not bear periodic interest rate payments.
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