By TheStreet Staff What Are Interest Rates? When people need to finance large purchases like a home or a car, start a business, or pay college tuition, they often turn to their bank for a loan. These loans can be short-term in nature, lasting just a few months, but they can also be longer-term, like mortgages, which can have a duration of as many as 30 years. In return for lending people money, banks look to be repaid the principal of their loan along with interest. Thus, interest is the price you pay to borrow money, and the terms of interest set within the loan contract are called interest r…