Interest Rate Legal Meaning and Definition

Here is a simplified definition of the legal term Interest Rate.

Interest Rate (noun):

The percentage of a loan or debt that is charged as a fee for borrowing money, usually expressed as an annual percentage of the principal (original loan amount). This fee is an additional amount that is repaid over and above the initial money borrowed.

Example: If a bank provides a loan of $100 with an interest rate of 10% per annum, the borrower must pay back the original $100 plus $10 in interest.