Pre-paid Interest


  • Interest that is paid before it is due to save the borrower money on taxes.

upfront interest payments

Alternate Spellings

Related Terms and Acronyms

  • Accrued Interest Definition,
    • Interest which has already been earned but has not yet been paid.
  • Interest (int, IN) Acronym & Abbreviation,
    • Money paid for the use of borrowed funds, usually expressed as an annual percentage.
    Bank account transaction code.
  • Interest Factor Definition,
    • The decimal equivalent for an interest rate on a unit amount for a period of time. Computed by interest rate divided by number of days in a basic year times the number of days accrued.
  • Interest Rate (IR) Acronym, Very Important,
    • The rate a lender charges an individual to borrow money.
  • Loan Definition,
    • Letting another party use something of value temporarily.
  • 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.
  • Point Definition,
    • A point equals 1 percent of a mortgage loan. Some lenders charge "origination points" to cover expenses of making a loan. Some borrowers pay "discount points" to reduce the loan's interest rate.
  • Pre-paid Expenses Definition,
    • also called prepaid items or prepaids -- Recurring costs such as taxes, insurance and interest that are paid at closing and which cannot be financed.
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