Cost of borrowing
Market basicsThe all-in rate you pay on debt, set largely by your credit score.
In plain terms
Any debt costing more than your realistic expected return is the highest-return investment available to you.
1492 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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Implied cost of borrowing
Fundamental analysisInterest actually incurred on borrowings — expensed plus capitalised, with lease and non-borrowing elements removed — divided by average gross borrowings.
In plain terms
Four lines of arithmetic that turn a figure everybody quotes into a question about which note to open. Too low usually means something is being built; too high usually means the year-end debt figure is lower than the debt carried through the year.
Effective interest rate
Market basicsThe true annual cost of borrowing once compounding, fees and the repayment schedule are counted.
In plain terms
The number on the loan document is often not what you pay. A "no-cost EMI" usually hides the discount you did not get.
One-time settlement
Regulation & taxAlso called: OTS
An agreement under which a lender accepts less than the full amount outstanding and closes the account, which is then reported as settled rather than closed.
In plain terms
Price it properly: the discount today against the cost of borrowing on a marked record for the years the mark survives. Only one side of that comparison is in the room when the offer is made.