FinanceAdvisor

One form of interest familiar to most of us is on our credit card purchases. We are charged a monthly interest rate on our unpaid balances. If you spend $100, you will be charged interest each month for the portion of the original loan remaining. If you pay $20 on the loan in the first month, you will reduce the loan to $80. The next month, however, you will have to repay $80 plus the monthly interest. continued…

If you have a long-term loan with high interest, then you might find yourself paying almost as much in interest payments as you are towards the money you borrowed. If this is the case, then you should look at ways to reduce those loan interest payments. Reducing your loan interest payments will help you to pay off your loan more quickly, and thereby save yourself money. Here are some tips on how to reduce your loan interest payments. continued…

Over the past two years, the Federal Reserve has raised interest rates substantially. Consequently, credit card annual percentage rates have followed suit. Nearly all credit cards tie their interest rates to the prime rate, which has doubled to 8% from 4% during the string of rate hikes that began in 2004. This has led to interest rates on credit cards rising by 30% or more. Since August of 2006, the Federal Reserve has kept interest rates steady, and many economists believe the next move may be a reduction in rates. However, the rate reductions have yet to begin, and credit card interest rates remain relatively high. continued…

The zero interest rate policy (ZIRP) is a Keynesian macroeconomics scheme for economies exhibiting slow growth with a very low interest rate, such as contemporary Japan. The Keynesian (and neo-Keynesian) thesis is that these countries are in the so-called liquidity trap, an assessment with which neoclassical economics disagrees. continued…

TIBOR stands for the Tokyo Interbank Offered Rate and is a daily reference rate based on the interest rates at which banks offer to lend unsecured funds to other banks in the Japan wholesale (or “interbank”) money market. TIBOR is published daily by the Japanese Bankers Association (JBA). continued…

The Wall Street Journal Prime Rate (WSJ Prime Rate) is defined by The Wall Street Journal (WSJ) as “The base rate on corporate loans posted by at least 75% of the nation’s 30 largest banks.” It is not the ‘best’ rate offered by banks. It should not be confused with the Federal Funds Rate set by the Federal Reserve. continued…

In economics, the time preference theory of interest is the idea that interest is the price that borrowers put on having money now rather than having money later. continued…

The TED spread is the difference between the interest rate for U.S. Treasuries and Eurodollars as represented by the London Inter Bank Offered Rate (LIBOR). The TED spread is a measure of liquidity and shows the flow of dollars between the U.S. and Europe. continued…

Subprime (also sub-prime or B-Paper) describes a specific lending market sector. Typically, subprime products (e.g., loans, mortgages, or credit cards) are for persons with blemished or limited credit history - those who do not qualify for the prime rate market. continued…

SIBOR stands for Singapore Interbank Offered Rate and is a daily reference rate based on the interest rates at which banks offer to lend unsecured funds to other banks in the Singapore wholesale (or “interbank”) money market. continued…