Various financial institutions want to service your
loan. Whether it’s a home loan, a
car loan, or a personal loan, this can be a big decision. How do you decide if an interest rate
is right for you?
First, let’s take a look at where interest rates come from
and whether or not there is a standard interest rate or whether they are being
selected arbitrarily. Interest rates are based on a couple factors. One …the amount of money you are looking to borrow. Two … the number of months in the loan’s
term.
Second, learn the difference between fixed and variable
interest rates. A fixed interest
rate will stay the same for the duration of the loan. A variable interest rate will fluctuate without warning. Also important is to make sure to
understand the special terms and conditions that may apply with “special” or
“introductory” rates. In other
words, be skeptical about “special financing offers,” and be sure to read the
fine print.
Third, calculate some numbers on your own before visiting a financial
institution. Compare across the
board to see which financial institution offers the lowest interest rates given
your circumstances.
Determine how many months are reasonable for your loan’s term. Once you discover a suitable interest
rate, determine how the lenders you are considering will apply that rate to
your loan’s principal.
It’s always best in these situations to consult with someone
you trust to get the best information. Call a Bank of Luxemburg loan officer at (920) 845-2345 to see how our
interest rates and service compare. You can also learn more about us by visiting our web page at
bankofluxemburg.com.
