Interest Rate Collar

Floor (Minimum Interest Rate)
In finance, a floor refers to the minimum interest rate set by the lender on a loan or other obligation. This ensures that the interest rate will not fall below a certain level, which provides a safety net for lenders' returns. It contrasts with a cap, which sets an upper limit on the interest rate.

Accounting Terms Lexicon

Discover comprehensive accounting definitions and practical insights. Empowering students and professionals with clear and concise explanations for a better understanding of financial terms.