What does interest mean in banking?

Interest is the amount of money a lender or financial institution receives for lending out money. Interest can also refer to the amount of ownership a stockholder has in a company, usually expressed as a percentage. Interest is the monetary charge for borrowing money—generally expressed as a percentage, such as an annual percentage rate (APR).

What is interest on a loan?

Interest is the monetary charge for borrowing money—generally expressed as a percentage, such as an annual percentage rate (APR). Interest may be earned by lenders for the use of their funds or paid by borrowers for the use of those funds.

What does credit mean in banking?

The word "credit" has many meanings in the financial world, but it most commonly refers to a contractual agreement in which a borrower receives a sum of money or something else of value and commits to repaying the lender at a later date, typically with interest.