2 min read
Definition
Interest in advance means the interest for a period is taken at its start. Because you part with the money sooner than under interest in arrears, the effective cost is slightly higher for the same nominal rate. It is common on some leases and short facilities.
In plain terms
Paying the interest before you have used the money is dearer than paying it after — the timing costs you.
Why it matters for your company
Check whether interest is charged in advance or arrears when comparing — advance is marginally more expensive. See interest in arrears.
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Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.