Here is the reality about borrowing money: it isn’t free.
The bank loans money for you to purchase something you really want, and you have to pay the bank for their help. The way you pay the bank for the money you borrowed is through the interest rate that is applied to your loan.
Interest rates and how those are determined is a very complex subject. We could get into supply and demand, inflation, and the federal government, but we don’t have enough room in this blog space for that.
Instead, what we will tell you about interest rates is that the biggest determining factor is YOU.
Your credit score, borrowing history, down-payment, income, and the collateral that you are borrowing against are some of things that determine what interest rate you receive.
No one likes to pay interest, so do your part to be a good borrower and a good bank customer by keeping up with the things that are within your control to influence having a better rate.
Use this handy loan payment calculator to see how the interest rates can impact your monthly payment.