Credit Contracts and Consumer Finance Act 2003, s 16A
Interest is the cost of borrowing money, where the borrower pays a fee to the lender for the loan. For example, if you borrow $1,000 and the interest rate is 10% per year it will cost: $1,000 × 10% = $100 for 1 year. At the end of the contract period, you will pay back the lender the $1000 plus the $100 = $1100.
The interest rate is set by the lender and is usually shown in an annual basis (sometimes called “per annum”).
Note: The CCCF Act also provides separate, more limited protections for other types of leases of goods, called “consumer leases”.