Interest rate

The interest rate is the percentage charged on a credit, loan or outstanding amount. It determines how much extra someone pays on top of the original borrowed or owed amount. When interest rates rise, credit becomes more expensive and financing costs increase for both households and businesses.

Late-payment interest may also be due on overdue payments. If an invoice is not paid within the agreed term, an interest rate can be applied to the outstanding balance. More then has to be repaid than the original invoice amount. This compensates the creditor for not having the money available on time.

High interest rates and repeated payment arrears can increase financial pressure and raise the risk of over-indebtedness. Anyone who structurally takes on more financial obligations than they can bear runs a greater risk of debt and payment problems.

The definitions in this section reflect the Belgian situation, unless otherwise stated. The texts summarise concepts in everyday language and should not be read as comprehensive or definitive. Suggestions or corrections may always be sent to glossary@tcm.be.

Updated: 10/08/2026