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for questions that relate to interest. Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets.

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Why would a lender raise interest rates if you are in danger of not being able to pay your l...

The lender's expected loss due to default is one such cost, and it typically accounts for a significant portion of the credit spread (that part of the interest rate in excess of "risk-free" interest rates … The company then applies that penalty interest rate fully expecting that they will need to pursue a legal claim to recover the past due card balance and the money value of the penalty interest rate (which …
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