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Effective Interest Rate (EIR) (PI7467)

Effective interest rate (EIR) for the most representative loan product of the organization during the reporting period.
Reporting format
Decimal
Metric type
Flow
Metric level
Product/Service, Organization
IRIS metric citation
IRIS, 2016. Effective Interest Rate (EIR) (PI7467). v4.0.

Footnote

Organizations should footnote all assumptions used.

Usage Guidance

  • This metric is intended to capture the rate that converts all the borrower's financial costs for a loan into a single declining balance interest calculation. It includes the effects of interest rates (whether they are calculated on a flat or declining basis), payment schedules, commissions, fees, discounting, and compensating balances.
  • Organizations should refer to the tool created by the MFTransparency Organization that provides guidance on EIR calculations: http://www.mftransparency.org/pages/ctp-tool/