How interest rates affect your loan

The interest rate has a major effect on the total cost of a loan. Understanding how interest works helps you prepare for changes.

You will need

• Your loan agreement
• A loan calculator

Steps

1. Know your interest type

   Variable or fixed rate?

2. Know the reference rate and margin

3. Calculate the monthly payment

4. Prepare for a rise

5. Consider interest rate protection

6. Negotiate the margin

7. Follow interest rates

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