What does it mean?
Interest rate is the percentage amount of charge applied to the principal amount by the lender, which means that the total money owed increases to principal + Interest percentage of the principal. The lender can be banks or any financial institutions.
Bank charges can be fixed or variable, it depends on the type of the loan like mortgages, credit card bills or educational loans.
Points to remember
- Interest rates can often vary over a loan period and can also affect the loan. It is always advisable to read the terms and conditions carefully before application and monitor your interest rates.
- Regularity in repayment majorly affects one’s credit score, so it is advisable to repay one’s loans on time.