Definition
- The interest rate factor used to calculate the interest charges on a monthly basis. The factor equals the yearly rate divided by 12. See also "Periodic Rate."
Synonyms
30 day rate, APR divided by 12, monthly rate
Alternate Spellings
Periodic Rate
Related Terms and Acronyms
- Annual Percentage Rate (APR) — Acronym, Very Important,
- A yearly rate of interest that includes fees and costs paid to acquire the loan. Lenders are required by law to disclose the APR. The rate is calculated in a standard way, taking the average compound interest rate over the term of the loan, so borrowers can compare loans. In mortgages, it is the interest rate of a mortgage when taking into account the interest, mortgage insurance, and certain closing costs including points paid at closing. There is no APR in an automobile lease; instead, the cost of money is expressed as the money factor.
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A number used to compare costs associated with mortgage loans and other forms of financing.
- Credit Card (CC) — Acronym, Very Important,
- A plastic card with a coded magnetic stripe that, when signed, entitles its bearer to a revolving line of credit, with a credit limit and interest rate determined by the borrower's income and credit report.
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A payment card that gives customers access to a revolving line of credit.
- Periodic Rate — Definition,
- The interest rate in relation to a specific amount of time. For example, the monthly periodic rate is the cost of credit per month whereas the daily periodic rate is the cost of credit per day.
- Rate — Definition,
- Percentage a borrower pays for the use of money, usually expressed as an annual percentage.
