I-spread

Okay, imagine you have a big pizza and you want to share it with your friends. You cut the pizza into smaller pieces, right? Now think of the pizza as a loan, and the smaller pieces as the interest you'll have to pay back on that loan.

When you take out a loan, the bank will tell you how much interest you need to pay on top of the loan amount. That's how they make money! The interest rate is usually a percentage of the loan amount, like 5% or 10%.

But sometimes, the bank wants to make even more money. So they take the interest rate they're charging you, and then they add another percentage on top of that. That extra percentage is called the i-spread.

For example, let's say the bank is charging you 5% interest on your loan. But they also add an i-spread of 2%. That means the actual interest rate you're paying is 7%. So if you borrow $100, you'll have to pay back $107 in total (the original loan plus the interest).

The i-spread is just a way for banks to make more money off of loans. But it's something you need to be aware of when you're looking for a loan, because it can make a big difference in how much you have to pay back in the end.