Interest rate guarantees (IRG)

This refers to a contractual guarantee which can apply to both loans and fixed yield investments.

Interest rate guarantees (IRG) limit the movement of interest rates to within a specified range for a certain time period. IRG’s protect investors from a steep drop in interest rates, while borrowers are protected from an increase in rates. In both cases, a premium is usually paid for the guarantee.

Interest rate guarantee is a term normally found in financial management.

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