pay interest

USAGE SUMMARY

"pay interest" is correct and usable in written English.
It is typically used in a financial context to indicate that an organization has paid a sum of money to another organization in return for borrowing money. For example, "The company paid interest on their loan at the end of the year."

✓ Grammatically correct

News & Media

Science

Formal & Business

Human-verified examples from authoritative sources

Exact Expressions

60 human-written examples

They must pay interest.

The New York Times

We have to pay interest on it.

The New York Times

You pay interest on the interest.

The Guardian

"I don't want to pay interest.

The New York Times

Deposits, which normally pay interest, can now incur a charge.

The Economist

"It increases it, because you have to pay interest".

The New York Times

All big central banks now pay interest on reserves.

The Economist

You pay interest on the interest on the interest.

The Guardian

California requires insurers to pay interest on late payments.

The New York Times

You don't pay interest on an unarranged overdraft.

The Guardian - Money

A short must borrow stock in order to sell it, and pay interest when he does.

The Economist

Expert writing Tips

Best practice

When discussing financial obligations, ensure the context clearly indicates who is responsible to "pay interest" and to whom it is being paid. This avoids ambiguity and ensures clarity in financial communications.

Common error

Avoid using "pay interest" when the context refers to repaying the principal amount of a loan. "Pay interest" specifically denotes the cost of borrowing money, separate from the original loan amount.

Linguistic Context

The phrase "pay interest" functions as a verb phrase indicating the action of providing compensation for the use of borrowed money or assets. According to Ludwig, this phrase is grammatically correct and commonly used.

Expression frequency: Very common

Frequent in

News & Media

59%

Science

20%

Formal & Business

10%

Less common in

Wiki

4%

Reference

4%

Encyclopedias

0%

Ludwig's WRAP-UP

The phrase "pay interest" is a common and grammatically sound expression used to describe the act of compensating a lender for borrowed funds. Ludwig's AI confirms its validity and widespread use, particularly in news, science, and business contexts. When writing about financial topics, remember that "pay interest" differs from repaying the principal and refers specifically to the cost of borrowing money. Alternatives such as ""remit interest"" or "settle interest" may offer a more formal tone in certain situations.

More alternative expressions

Phrases that express similar concepts, ordered by semantic similarity:

make interest payments

A more descriptive phrase that highlights the action of paying interest.

settle interest

Emphasizes the act of finalizing the payment of interest.

remit interest

Focuses on the transmission or sending of the interest payment.

yield interest

Shifts the focus to the amount of interest produced by an investment.

service the debt

Highlights the act of managing and fulfilling the obligations of a debt, including interest payments.

discharge interest

Indicates the full satisfaction of the interest obligation.

cover interest costs

Focuses on having sufficient funds to meet interest payment obligations.

honor interest obligations

Emphasizes the fulfillment of contractual agreements regarding interest payments.

bear interest

Describes the condition of an account or financial instrument that is subject to interest payments.

reimburse interest

Highlights returning funds covering previously paid interest.

FAQs

How is "pay interest" typically used in financial contexts?

In finance, "pay interest" refers to the act of compensating a lender for the use of their money. It is commonly associated with loans, bonds, and other forms of debt where the borrower is required to "remit interest" to the lender according to an agreed schedule.

What's the difference between "pay interest" and repay principal?

"Pay interest" means to compensate the lender for the cost of borrowing, while repaying the principal means to return the original amount of money borrowed. The principal is the original loan amount, and interest is the cost of using that money. It's important not to confuse "servicing the debt" (interest payments) with the actual debt repayment.

Are there situations where you don't "pay interest"?

Yes, some financing channels do not require paying interest, such as equity financing, where investors receive a share of ownership rather than fixed interest payments. Similarly, some Islamic financial products are structured to comply with Sharia law, which prohibits paying or receiving interest. Another example could be a 0% introductory APR on a credit card, where, for a limited time, you don't "discharge interest".

What can I say instead of "pay interest" to sound more formal?

Depending on the context, you could use more formal alternatives such as ""remit interest"", "settle interest", or "honor interest obligations". These options may be more appropriate in legal or business documents.