Interest Factor

Importance: 0.57

Is a company: no

Is a proper noun: no

Synonyms

  • calculation
  • interest rate factor

Definition of Interest Factor

  1. The decimal equivalent for an interest rate on a unit amount for a time period. It is computed by interest rate divided by number of days in basic year times the number of days accrued.

Related Terms and Acronyms

  • Bank Definition,
    • An institution that acts as a financial intermediary by receiving money from depositors and lenders and also lending to borrowers.
  • Interest-Crediting Methods Definition,
    • A number of methods used to establish how interest is accrued, owed and dispersed to the parties due.
  • 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.
  • Per Diem Interest Definition,
    • Interest that is charged daily; usually refers to the partial month's interest that the buyer pays on the mortgage covering the period from the day of closing to the end of the month.
  • Money Factor Definition,
    • A leasing term that expresses the cost of borrowing. It is similar to the interest rate paid on a conventional car loan, but it is expressed as a difficult-to-understand fraction. To convert the money factor to a recognizable interest rate, multiply it by 24. For example, a money factor of .00345 x 24 = 9 percent interest. The money factor is negotiable, and consumers who lease a new car should look for a money factor close to the current interest rate charged for new-car loans.
  • Compounding Method Definition,
    • Used in Bank rate tables. These include: S--Simple interest. A--Compounded annually. H--Compounded semi-annually. Q--Compounded quarterly. M--Compounded monthly. D--Compounded daily.
  • Pre-paid Interest Definition,
    • Interest that a borrower pays before it is due, usually to save taxes.
  • Interest Adjustment Date Definition,
    • The date one month prior to the beginning of amortization when accrued interest computed on the monies advanced becomes due.
  • Loan Definition,
    • Letting another party use something of value temporarily.
  • Interest (int, IN) Acronym & Abbreviation,
    • Money paid for the use of borrowed funds, usually expressed as an annual percentage.
    Bank account transaction code.
  • 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.
    A number used to compare costs associated with mortgage loans and other forms of financing.
  • Mortgage (mtg) Abbreviation, Important,
    • A mortgage is a contract stipulating a specific real property, typically a residence or building, as collateral for a loan. The mortgage incurs a rate of interest that varies according to term and other features.
  • Interest Rate (IR) Acronym, Very Important,
    • The rate a lender charges an individual to borrow money.
  • Lender Definition,
    • The bank or mortgage company offering the loan.
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