Interest Rates

Interest rates float and continuously compound.

A broker's interest rate is a function of utilization. Interest rates are non-decreasing over increases in utilization (they may remain flat as utilization increases, but they may not go down). It is conventional to make utilization rates very low at low utilization (so as to attract borrowers), and then spike at high utilization (so as to encourage repayment), though the specifics the interest rate curve is set by the broker.

Interest rates float with changing utilization. There are no guarantees that a loans interest rate will remain similar to its value at loan origination. Brokers attempt to strike a balance between predictable interest rates based on a range of acceptable utilization ratios, but may be incentivized to raise rates if high utilization creates a situation where lenders cannot withdraw their deposits.