Low rate loans are loans with low interest rates. Interest is the way the lender makes money off loaning money. Interest rates vary according to a variety of factors. Interest can be confusing and very costly. It is important for borrowers to understand the value of a low rate loan.
What constitutes a low interest rate is dependent upon a few things. The average interest rate and the borrowers credit are two main determining factors that lenders use to set an interest rate.
Interest rates are higher in bad economic conditions and lower in good economic conditions. Lenders, however, can add on to the average interest rate. They usually tack on extra percentages based upon the credit history of the borrower.
Interest rates are also affected by the market. When there are many borrowers looking for loans the lenders are going to be offering lower rates so they can get more business. However, if the market is slim, lenders are going to hike up their prices to make up for the loss of business.
Interest on a long term loan is going to cost more. That is because the interest rate is applied every year. When the loan begins the interest rate is calculated...
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