Definition

Noun: - The expense incurred for obtaining a loan or credit: This refers to the total cost a borrower must pay to a lender for the privilege of using borrowed money or assets. This cost is typically expressed as an interest rate and may include additional fees.

Usage

The term "borrowing cost" is used to discuss and compare the financial expense of loans in personal finance, business, and economics. It is a key factor in financial decision-making. - The borrowing cost for a mortgage has increased significantly this year. - Companies must carefully evaluate the borrowing cost before taking on new debt for expansion. - A lower credit rating usually results in a higher borrowing cost.

Advanced Usage

• "to calculate/compare borrowing costs": To determine or evaluate the total expense of different loan options.
  • Before choosing a lender, it is wise to compare the total borrowing costs.
• "to reduce/minimize borrowing costs": To take actions to lower the expense of a loan.
  • Making a larger down payment is one strategy to minimize borrowing costs over the life of the loan.

Variants and Related Words

• Cost of borrowing: A synonymous phrase with identical meaning.
• Interest expense: A core component of borrowing cost, specifically referring to the cost calculated as a percentage of the principal.
• Finance charge: A broader term that can encompass the total cost of credit, including interest and fees.

Synonyms

• Interest cost
• Finance charge
• Cost of credit

Related Terms (Not Phrasal Verbs)

• Annual Percentage Rate (APR): A standardized measure that represents the annual borrowing cost, including interest and certain fees.
• Prime rate: A benchmark interest rate that influences the borrowing cost for many loans.

Noun

1. the cost of borrowing something