The Blog

Musings on corporate finance, fund raising, capital markets and other matters

In the context of a loan, this informal expression typically refers to the total costs of the loan, including the interest expense, fees and any other payments due to the lender. It would normally also account for the time-value of money (payments made in the short term are worth more than those made at a later date). A better definition would be the Internal Rate of Return, or IRR of the loan.