effective interest rate - the actual rate of interest on a loan taking into account all financing costs. For example, Abel takes out a $100,000 real estate loan at 7% simple interest for one year. He pays three points plus loan fees of $1,000. His total financing costs are, therefore, $11,000 ($7,000 + $3,000 + $1,000) and the effective interest rate is 11%. See also annual percentage rate  and effective yield .

© 2004 Bella Vista Publishing Company, Inc.  ISBN 0-9718225-0-6

.
	Copyright Protection:   This real estate web site is created in the United States of America and protected by copyright laws.  Permission should be obtained prior to any reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording or likewise.
.