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.

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词条贡献者

法律翻译Daniel，毕业于英国一流的翻译学院，专注翻译各类与海商海事有关的法律文件。