The annual interest rate refers to the one-year loan interest rate.
The so-called interest rate is the abbreviation of "interest rate", which refers to the ratio of interest amount to deposit principal or loan principal in a certain period of time.
Usually divided into annual interest rate, monthly interest rate and daily interest rate.
The annual interest rate is expressed as a percentage of the principal, the monthly interest rate as a percentage, and the daily interest rate as a percentage.
For example, if the loan 1 000 yuan and the annual interest is 594 yuan, then the annual interest rate of the loan is 5.94%.
Extended data:
The loan interest rate is the interest rate charged by banks and other financial institutions to borrowers when they issue loans. There are roughly three categories: the loan interest rate of the central bank to commercial banks; The loan interest rate of commercial banks to customers; Interbank Offered Rate The decisive factors of bank loan interest rate are:
① Bank cost. Any economic activity needs cost-benefit comparison. There are two types of bank costs: borrowing costs-prepaid interest on borrowed funds; Additional cost-the cost of normal business.
② Average profit rate. Interest is the subdivision of profit, which must be less than the profit rate, and the average profit rate is the highest limit of interest.
(3) the supply and demand of borrowing money and funds. If the supply exceeds the demand, the loan interest rate will inevitably fall, and vice versa. In addition, the loan interest rate must also consider price changes, securities returns, political factors and so on.
However, some scholars believe that the upper limit of interest rate should be the marginal rate of return of funds. The factor that restricts the interest rate is regarded as the comparison between the profit growth rate of enterprises after borrowing bank loans and the loan interest rate. As long as the former is not lower than the latter, it is possible for enterprises to borrow money from banks.
Matters needing attention
1. When applying for a loan, the borrower makes a correct judgment on his repayment ability. Design a repayment plan according to your income level, leaving room appropriately, without affecting your normal life.
2. Choose the appropriate repayment method. There are two repayment methods: equal repayment method and equal principal repayment method. Once the repayment method is agreed in the contract, it shall not be changed during the whole loan period.
3. Repay on time every month to avoid penalty interest. From the month after the loan is initiated, it is generally the repayment date of the next month. Don't cause liquidated damages because of your negligence, so that banks can't apply for loans again.
4. Take good care of your contracts and IOUs, read the terms of the contracts carefully, and know your rights and obligations.
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