What Kind of Interest Rate?
Besides knowing the percentage of interest on a loan you should also ask what kind of interest rate you will be paying. There are fixed rates and variable rates. If you budget a certain amount each month for a loan payment and don’t want surprises, you should look for a fixed interest rate loan.
Variable rates are great if you expect to have changes in your financial situation soon. Your payment history and credit score may affect the rate, or the lender may use a set formula to determine the fluctuating rates. Ask the lender to explain how rates are calculated so you can choose the right type of loan for your lifestyle.
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