Loan Rates

The Three Loan Rates You Should Know About

Home Mortgage Loan Rates

Fixed-rate mortgages are the most common type of home loan offered up by lenders. These loans are popular because they feature monthly payments that are fixed over a 15 to 30 year span of time. Consumers are fans of fixed-rate mortgages because the interest rates cannot rise or fall over time because of inflation. This insures that there will be no surprises in the future.

With a fixed-rate mortgage, there are few options. The only choice the consumer has to make is between a shorter payment plan (for example, 15 years) and a longer payment plan (for example, 30 years). The advantages of the shorter plan include loan rates with lower interest paid overall. However, monthly payments can be much higher than with longer plans. The advantages of the longer plans, conversely, are that monthly payments are lower and interest rates are fixed over time. However, the longer plans also mean that more money will be paid out overall in interest.

Automobile Loan Rates

Different lenders and manufacturers have different loan rates for new and used cars. It is important for consumers to go through these different rates and make the calculations based on their incomes to see what is most affordable for them. There are various loan rate calculators online and separate agencies willing to help a consumer weed through the various interest rates.

A number of factors go into determining which option is best for a particular individual. If a consumer chooses to take an extended plan, this often means that the interest rates on the loan will be higher over a long period of time, although lower monthly payments may make this the most affordable option. Consumers with good credit, however, will want to put as much money down as possible to avoid paying more in interest. Shorter loan plans may cost more money up front, but the savings in interest over time may pay off well.

Student Loan Rates

While the cost of getting an education in the United States is on a continual rise, interest rates on student loans are nearing an almost all-time low. While a student loan is an affordable option, it is important to plan ahead and consider all the options. More and more students and their families are taking out college loans to pay for an education, and research is necessary to figure out when is the best time to take out these loans, and consolidate them to lock in a fixed interest rate. Stafford loans, the most common type of student loans in the country, have a current set interest rate of 5.3 percent, compared to 8.19 percent in the 2000-2001 school year. College students and recent graduates should look to consolidate loans earlier as opposed to later, before interest rates increase and the opportunity is lost.

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