What is the interest rate?

The interest rate is the main element based on which the interest is calculated. It is expressed as a percentage, in annual format.

For example, an interest rate of 9% means that to borrow, let's say 1,000 lei for 1 year, the client must pay 9%. The actual amount that must be paid is called interest. In the above case, the interest is 90 lei (1,000 x 9%).

Good to know: In the case of a loan, the interest is usually calculated monthly.

Speaking of interest, you should know that I have even prepared you a short guide in which we talk casually about a few banking terms that it is good to know. 😊