This is a fee you pay for borrowing money. It can also be a rate of earnings on your savings. You may borrow money for a car with a rate of eight percent. This means that you are paying an additional eight percent on the initial cost of the car to the lender. You may get interest of two percent from the credit union for your savings.
This means that your money multiplies as a reward for saving with the financial institution. It is wise to compare rates of interest before you make a decision to borrow or save.