Interest Rate is the amount a lender charges for borrowing Money, expressed as a percentage of the Loan amount.
The Interest Rate affects the Cost of Loans, Credit cards, and Mortgages.
# Loans:- A Higher Interest Rate increases the monthly payment on a loan and the total cost of the loan over its term. Borrowers with a Higher Credit score usually qualify for lower Interest Rates, While those with a lower Credit score may face higher rates.
# Credit Cards:- Credit Card Interest Rates affect the Cost of carrying a balance on the card. A Higher Interest rate means that the cost of borrowing will be higher , and It will take longer to pay off the balance if only minimum payments are made.
# Mortgages:- The Interest Rate on a Mortgage has a significant impact on the monthly payment and the total cost of the loan over its term. A Higher Interest Rate means a higher monthly payment and a higher total cost, While a lower Interest Rate means a lower monthly payment and a lower total cost.
In Conclusion, Interest Rate affects the cost of borrowing and can have a major impact on loan payments and total costs, So it is Important to consider Interest Rate when making Financial decisions.