Interest rates you need to know

Interest rates are a concept closely related to by refinancing, loans and credits of any type. A numerical value telling how much money you end up overpaying. When you borrow money, you pay interest on top of the principal. This is a form of remuneration to the lender. Interest is associated with many financial products.

• Loans
• Mortgages
• Savings

The individual interest rates are given in percentages. These are usually percentage of the principal. In many cases, you will then come across interest abbreviations. Such terms can take different forms and always mean something different in the end.

Interest rate designation

When you read the terms and conditions of any loan, don't just look at the number itself. The information behind the percentage is also important. If you want to know the abbreviations of each interest rate, read the table below.

Shortcut	Information
p.a.	Annual interest
p.s.	Semi-annual interest rate
p.q.	Quarterly interest
p.m.	Monthly interest rate

Of course, the abbreviation p.d., which presents the phrase per diem, is no exception. As probably all readers of this article correctly guess, this is the daily interest rate. Before signing a loan agreement, make sure you calculate the interest rate correctly, as the differences can be significant.

At an interest rate of 3 % p.a. you will actually only overpay 3 % per year. However, if the contract specifies an interest rate of 3 % p.a., this means that it is a semi-annual interest rate. So you will overpay 6 % per year.

Which interest rate is most important?

To make it not too easy, you can come across several types of interest rates. However, the classic interest rate should not be your starting point. Put the primary focus on the interest that hides all the associated payments and you can see where you stand at a glance. The annual percentage rate of charge is exactly that. abbreviated as APR. The value itself represents the combination of interest, but also other fees per year. These are usually account maintenance fees, etc. Learn to read interest rates and avoid future inconveniences.