An interest rate, in the most simple terms, is the percentage charged by a lender to a borrower for the use of their money. It applies to loans, credit, and savings. When you borrow, the interest rate is the cost of borrowing; when you save, it’s the money you earn. Interest rates are often expressed as an annual percentage rate (APR), showing how much interest will be paid or earned over a year. Rates can be fixed, meaning they stay the same, or variable, which means they can change over time.