Interest charges are fees that lenders impose on borrowers for the use of borrowed money. When you take out a loan or use a credit card, you agree to pay back the amount borrowed plus an additional percentage, known as the interest rate. This rate can vary based on factors like creditworthiness and the type of loan. These charges are typically calculated on an annual basis, known as the annual percentage rate (APR), but they can also be applied monthly or daily. Understanding interest charges is important for managing debt and making informed financial decisions, as they can significantly increase the total amount owed over time.