Interest Articles from HOMEOWNERSHIP.INFO Free Article Directory

Search our Site:

Interest is a fee, paid on borrowed capital. Assets lent include money, shares, consumer goods through hire purchase, major assets such as aircraft, and even entire factories in finance lease arrangements. The interest is calculated upon the value of the assets in the same manner as upon money. Interest can be thought of as "rent on money". For example, if you want to borrow money from the bank, there is a certain rate you have to pay according to how much you want loaned to you.

The fee is compensation to the lender for foregoing other useful investments that could have been made with the loaned money. These foregone investments are known as the opportunity cost. Instead of the lender using the assets directly, they are advanced to the borrower. The borrower then enjoys the benefit of using the assets ahead of the effort required to obtain them, while the lender enjoys the benefit of the fee paid by the borrower for the privilege. The amount lent, or the value of the assets lent, is called the principal. This principal value is held by the borrower on credit. Interest is therefore the price of credit, not the price of money as it is commonly - and mistakenly - believed to be.^{[citation needed]} The percentage of the principal that is paid as a fee (the interest), over a certain period of time, is called the interest rate.

Interest is the price paid for the use of savings over a given period of time. In ancient biblical Israel, it was against the Law of Moses to charge interest on private loans. During the Middle Ages, time was considered to be property of God. Therefore, to charge interest was considered to be commerce with God's property. Also, St. Thomas Aquinas, the leading theologian of the Catholic Church, argued that the charging of interest is wrong because it amounts to "double charging", charging for both the thing and the use of the thing. The church regarded this as a sin of usury; nevertheless, this rule was never strictly obeyed and eroded gradually until it disappeared during the industrial revolution.

Interest has often been looked down upon in Islamic civilization as well, and most scholars agree that the Qur'an explicitly forbids the practice. Medieval jurists therefore developed several financial instruments to encourage responsible lending. These instruments sometimes closely resemble interest, leading some to wonder whether they truly satisfy the letter and spirit of the rule.

Interest Subcategories Interest Articles Dangers Of Reverse Mortgages, Interest Rates Through The Roof by Jonathan Drake Jan 03, 2009 What lets seniors receive tax-free income and use the equity in their home without having to make a monthly payment or give up ownership is a reverse mortgage. The money that is collected is returned when the home is sold, usually only after the owne... Mortgage gloom set to continue through 2009 by Mark Aucamp Jan 03, 2009 In the last two months I have seen nine clients all wishing to remortgage their homes. Some of my clients are at the end of a mortgage deal, others are looking to consolidate their expensive secured loans, unsecured loans and credit card debts into a... What You MUST Know About Business Loans by Evan James Dec 31, 2008 Business Loans Canada - Related Roadmap If your major interest is information related to Business Loans Canada or any other such as Loan Sba, Unsecured Loan, Government Loans, Unsecured Small Business Loan, Quick Business Loan or Personal Lo... Some interesting facts and ideas for pet halloween costumes by jack jackson Dec 18, 2008 It is quite fun to dress up pets in different costumes during Halloween. There are many costumes to choose from, as we already have different costumes for adults and children. The pets can also join in the Halloween celebrations with the whole family... Avoid Overpaying For Credit Card Charges by Devora Witts Dec 09, 2008 Nobody likes to overpay on anything and least on credit card fees or charges. There are few things that people hate more than purchasing something and l... Christmas loans: The appropriate gifts of the festive season by Amelie Eve Nov 26, 2008 The loans for Christmas have been specially formulated to swipe out all the finance related issues during this Christmas. With the support of these loans, you can easily give wings to your desires. Actually, Christmas is one of the most awai... Cheap Secured Loan: Low Interest Rate Makes People Stress-Free by Aldrich Chappel Nov 24, 2008 The need for the secured loans is being felt in those moments when big amounts are required. Whenever a person is being disturbed by his large financial instabilities, he prefers to adopt the Low Interest Debt Consolidation Loans - How to Get a Low Rate by Debra Proctor Nov 07, 2008 Many people are interested in debt consolidation when they find themselves in debt that they can't seem to get paid off. Paying off all of your outstanding debts and only making one payment per month is very appealing for many reasons such as ease of... Home Equity Loans Versus Home Equity Lines Of Credit by Devora Witts Oct 30, 2008 There is a difference between these two ways of obtaining credit. As great as the differences are, the uses are also radically opposite. The only thing in common is the equity that your home represents as collateral to the credit you get and the way ... Refinance Loan Online - Is it time to refinance your loan? by Brigitta Schwulst Oct 20, 2008 There are many reasons for loan refinance online, including replacing a current loan with a new loan that has lower interest rates and lower repayments. Refinance your loan online and use the new loan to consolidate debts, improve your financial posi...