add on interest

Interest that is computed on the original face amount of a loan and that remains the same even as the principal declines.

• A $10,000 loan with add-on interest at 8% payable over three years would require equal annual interest payments of $800 for three years, regardless of the unpaid principal amount. With add-on interest, the effective rate of interest is typically about twice the stated add-on interest rate. In the example just cited, then, the effective rate of interest would be about 16%.

— Also termed block interest. See add-on loan under LOAN.

---

词条贡献者

资深译员Betty，知名法学院国际金融法专业，擅长翻译各类与并购业务相关的法律文件。