What is the definition of Interest Rate (IR) and how it can affect your money?

The rate of interest is the amount charged on any debt by the creditor to the borrower. An interest rate is expressed in percentage points (%) or in basis points (bps) and is usually charged on an annual rate.

The rate of interest charged will usually depend on the credit-worthiness or riskiness of the borrower. A high-risk borrower will be charged a higher rate of interest than a low-risk borrower, all other things being equal.