Lesson 2 of 7

Revenue: interest, fees and the yield actually earned

The first term of the lending equation is income from loans. This lesson explains what it includes, why the rate written in a loan contract, the effective annual rate and the yield a lender actually earns are three different numbers, how flat rates and fees widen the gap, and how the yield gap shows how much of the expected revenue is really collected.

Published 15 October 2026