capitalized interest

USAGE SUMMARY

The phrase "capitalized interest" is correct and usable in written English.
It is typically used in financial contexts to refer to interest that is added to the principal balance of a loan or investment rather than being paid out as cash. Example: "The company decided to capitalize interest on the construction loan, allowing the costs to be added to the total project expenses."

✓ Grammatically correct

Academia

News & Media

Formal & Business

Human-verified examples from authoritative sources

Exact Expressions

24 human-written examples

Notwithstanding the provisions of section 729(a)  of the Public Health Service Act, the reissued loan shall be made in an amount, including outstanding principal, capitalized interest, accrued unpaid interest not yet capitalized, and authorized late charges.

Cornell University

Capitalization of interest: You can't deduct capitalized interest, which is interest added onto the cost of a self-constructed, long-term asset.

Forbes

Capital spending in our Wireless segment, excluding capitalized interest during construction, represented 55% of our total spending and increased 10% in 2012; the Wireline segment, which includes U-verse services, represented 45% of the total capital expenditures, excluding interest during construction, and decreased 15% in 2012.

Huffington Post

The capitalized interest expense is not allocated to the investment expenditure, and depreciation deductions attributable to the capitalized interest expense are subject to the passive loss limitation as long as the property is used in a passive activity.

Cornell University

be made only if net revenues from the project (including capitalized interest, but not including reasonably required financing reserves) are insufficient to pay the costs specified in subsection (a)(2).

Cornell University

The overall cap on principal and capitalized interest for all loans covered by LRAP shall be $100,000 for law school loans, no more than $10,000 of which can be for bar study loans.

University of California, Berkeley

Human-verified similar examples from authoritative sources

Similar Expressions

36 human-written examples

Non-capitalized interest is accrued interest on a loan that was not reclassified as principal at the time of restructuring.

Cornell University

California "could have just opened the door for well-capitalized interests... to really jeopardize the success of the marketplace," he said.

Los Angeles Times

Principal: Principal refers to the total amount borrowed plus any capitalized fees and interest.

Yale University

The 20th century saw a revival in Japanese printmaking: the shin-hanga ("new prints") genre capitalized on Western interest in prints of traditional Japanese scenes, and the sōsaku-hanga ("creative prints") movement promoted individualist works designed, carved, and printed by a single pair of hands.

Wikipedia

Patel says the company is indeed talking with investors again, saying Hired is "well-capitalized" but receiving "interest".

TechCrunch

Expert writing Tips

Best practice

In financial reports, always disclose the amount of "capitalized interest" separately to provide transparency about the true cost of assets or projects.

Common error

Avoid assuming that "capitalized interest" is the same as simple interest. "Capitalized interest" becomes part of the principal, affecting future interest calculations, while simple interest is calculated only on the principal balance.

Linguistic Context

The phrase "capitalized interest" functions as a noun phrase that typically acts as the object of a preposition or a complement within a sentence. Ludwig AI shows it's used to describe a specific type of interest that has been added to the principal amount.

Expression frequency: Common

Frequent in

Academia

32%

News & Media

56%

Formal & Business

12%

Less common in

Science

0%

Encyclopedias

0%

Wiki

0%

Ludwig's WRAP-UP

In summary, "capitalized interest" is a noun phrase frequently used in financial and legal settings to refer to interest that has been added to the principal amount of a loan or investment. Ludwig AI confirms that the phrase is grammatically correct and commonly used, especially in academic, news, and business contexts. Understanding the implications of "capitalized interest" is crucial for both borrowers and financial professionals to accurately assess the long-term costs and impacts on overall debt. When discussing financial agreements, ensure clear communication to avoid misunderstandings, remembering that "capitalized interest" becomes part of the principal, affecting future calculations.

More alternative expressions

Phrases that express similar concepts, ordered by semantic similarity:

accrued interest added to principal

Emphasizes the process of adding accrued interest to the principal amount.

interest rolled into the loan balance

Focuses on the inclusion of interest within the total loan amount.

interest added to the loan's principal

Highlights that the loan principal increases because of the interest.

interest converted to principal

Describes the change of interest into principal.

interest included in the outstanding balance

Focuses on how interest becomes part of what is owed.

principal plus accumulated interest

Highlights the combination of the original principal and the interest that has built up.

loan balance including interest

Specifies the overall balance inclusive of interest charges.

interest folded into principal

Describes the merging of interest into the original principal amount.

debt balance with capitalized interest

Highlights the type of interest as contributing to the overall debt.

interest becoming part of the principal

Emphasizes the transformation of interest into the principal.

FAQs

What happens when interest is capitalized on a loan?

When interest is capitalized, it's added to the loan's principal balance. This means that future interest accrues not only on the original principal but also on the previously accrued interest, potentially increasing the total cost of the loan.

How does "capitalized interest" affect student loan repayment?

With student loans, "capitalized interest" can significantly increase the overall debt. It typically occurs after periods of deferment or forbearance, leading to a higher principal balance and increased monthly payments or a longer repayment period.

What are some alternatives to "capitalized interest"?

While "capitalized interest" is a specific term, you might describe the concept using phrases like "accrued interest added to principal" or "interest rolled into the loan balance" to convey the same idea in simpler terms.

Is "capitalized interest" always a bad thing?

Not necessarily. In some business contexts, capitalizing interest during construction or development can be a standard accounting practice. However, for borrowers, especially with student loans, "capitalized interest" can lead to a larger debt and higher long-term costs.