Business People Club

Search All Topics !

How Do Interest Rates Work?

0 like 0 dislike
219 views
by CheeryGrin
How Do Interest Rates Work?

Advertise With Us

Create and Manage Your Sponsored Content

Promote Your Products and Services

 

  • Niche Categories
  • Flat Pricing
  • Unlimited Views
  • Sell Products
  • Highlighted Sponsored Post
  • Sell Services
  • Promote Causes
  • Reply To Customer Inquiries
  • Build Backlinks
  • Promote Affiliate Links
  • Instant Notifications
  • Build Author Profile
  • Cancel Anytime
  • Get Started

Please log in or register to reply to this post.

1 Comment

0 like 0 dislike
commented by PerfumedNecromancer
One of the most confusing things about borrowing money is calculating the interest rates. Interest rates vary and when you go to take out a loan or a mortgage it might seem intimidating when the loan officer starts talking about interest rates per annum, nominal rates and market interest rates.

There are different types of interest rates depending on whether you are borrowing money or investing money.

When you are borrowing money you have to pay interest back at a set rate. These rates are determined by several factors. One of these factors is risk. If you have a bad credit rating the rates at which you pay interest on loans may be significantly higher than someone who has a pristine credit rating.

The reason for this is that the lender sees you as a risk. When you are a risk, the rates applied to your lending rise. This can make it especially difficult for someone with a bad credit rating to purchase anything major including a home or a vehicle. They may be able to afford the initial payments, but once the interest rates are added, the amount exceeds their budget.

Another factor that determines interest rates is the length of the loan. Lower interest rates are often offered if the consumer extends the period of the loan. To the consumer this may seem like a windfall. They view the smaller interest rates as a savings to them. Short term it is but since the loan is being extended to take advantage of the lower interest rates, they are actually paying out more money in interest over the length of the loan.

Interest rates do not only affect just the consumer but they have an impact on the economy as a whole as well. When interest rates climb, people are less likely to purchase goods that aren’t essential to their lives. Car sales drop and home sales often plummet as well. The average consumer doesn’t want to spend the extra money on the increased interest because the rise in rate just means less money in their pocket. The cost of the goods they are purchasing hasn’t changed, it’s the cost of purchasing those goods that has.

On the other side of the interest rates spectrum is investing. People want to invest when interest rates are high so as to yield the biggest profit. Years ago the traditional savings account was often viewed as the traditional investment tool. The bank would post their interest rates and people would save their money in the hopes that it would grow substantially over the course of a number of years.

Today you are more apt to find people investing in many diversified things; money market funds, the stock market and bonds. If you decide to invest in bonds they will have a posted interest rate. The rates on bonds might be slightly higher than other investments because with many bonds you have to lock your money in to the investment for a specific amount of time. The period can be anywhere from several months to several years.

Interest rates impact our lives everyday whether we are aware of them or not. To keep on top of both your borrowing and investment needs it’s a good idea to follow interest rates.

Related posts

0 like 0 dislike
1 Comment 286 views
How in the World Do People Save Money?

How in the World Do People Save Money?

by PlushSeal
0 like 0 dislike
1 Comment 237 views
How Do I Choose A Lender?

How Do I Choose A Lender?

by MammothMoth
0 like 0 dislike
1 Comment 282 views
How to save money as small business owner?

How to save money as small business owner?

by AmazingKitty
0 like 0 dislike
1 Comment 247 views
How Can I Get Out Of Debt?

How Can I Get Out Of Debt?

by Oystrich
0 like 0 dislike
1 Comment 246 views
How To Safeguard Your Financial Life?

How To Safeguard Your Financial Life?

by KeyboardPie
0 like 0 dislike
1 Comment 362 views
How to Find Hidden Money for Your Business Through Revenue Recovery?

How to Find Hidden Money for Your Business Through Revenue Recovery?

by UncleRhino
0 like 0 dislike
1 Comment 311 views
How to raise funds?

How to raise funds?

by Cybora
0 like 0 dislike
1 Comment 214 views
How To Make Sure Your Financial Budget Will Succeed?

How To Make Sure Your Financial Budget Will Succeed?

by SleepyFledgling
0 like 0 dislike
1 Comment 923 views
How To Save Money On Your Home Heating Bills?

How To Save Money On Your Home Heating Bills?

by SwiftHeroine
0 like 0 dislike
0 comments 181 views
Five Steps to Create a Budget for your Small Business

How I hate budgets! Every time an accountant told me to put together a budget for my company, my response was - When ... Have systems in place to increase revenue and decrease expenses as necessary.

by UncleRhino
0 like 0 dislike
0 comments 624 views
Cost-Reducing Tips for the Small-Business Owner

One of the keys to running a successful small business or home office is learning to control costs. Even the smallest expenses can ... a postage meter or get a mail scale to eliminate overpaying.

by HuggingDuck
0 like 0 dislike
0 comments 189 views
Business Funding Sources

When you decide to open a business on your own, often times the excitement will have you ready to launch your idea right away, however ... can start at $20,000 all the way up to around two million.

by TrainedGuy
0 like 0 dislike
0 comments 219 views
6 Tips For Saving Money On Your Next Computer Purchase

Buying a Computer does not need to be a budget breaker. A Computer purchase often includes additional components and software ... buying, will keep the salesman commissions from emptying your wallet!

by SnailMail
0 like 0 dislike
1 Comment 232 views
Tips For Better Online Banking?

Tips For Better Online Banking?

by Mosquiche
0 like 0 dislike
1 Comment 197 views
How Do You Set Consulting Fees?

How Do You Set Consulting Fees?

by TrainedGuy
0 like 0 dislike
1 Comment 259 views
What are the Advantages of Low Interest Credit Cards?

What are the Advantages of Low Interest Credit Cards?

by MysteryWasp
0 like 0 dislike
1 Comment 306 views
What is "RSS" and Do I Need It?

What is "RSS" and Do I Need It?

by TrainedGuy
0 like 0 dislike
1 Comment 278 views
How To Make Money Selling Ebooks?

How To Make Money Selling Ebooks?

by HairyFoal
0 like 0 dislike
1 Comment 299 views
How To Make Money Using RSS Feeds?

can you really make money using rss feed?

by HarshThunder
0 like 0 dislike
1 Comment 338 views
0 like 0 dislike
1 Comment 232 views
0 like 0 dislike
1 Comment 225 views
How to make money on craigslist?

How to make money on craigslist?

by MammothMoth
0 like 0 dislike
1 Comment 195 views
How To Save Money On Gas?

How to save money on car’s gasoline?

by KeyboardPie
0 like 0 dislike
1 Comment 308 views
How do direct sales work?

How do direct sales work?

by Frank PREMIUM MEMBER
0 like 0 dislike
1 Comment 283 views
How to attract big investors for Small Cap Companies ?

How to attract big investors for Small Cap Companies ?

by DreamBaby
0 like 0 dislike
0 comments 147 views
How to create A Trade Show Budget?

How to create A Trade Show Budget?

by Falconjurer
0 like 0 dislike
1 Comment 246 views
How to get business grants?

How to get business grants?

by Conjursa
0 like 0 dislike
1 Comment 250 views
How to Choose a Credit Card Processing Company?

How to Choose a Credit Card Processing Company?

by ForceSoldier
0 like 0 dislike
1 Comment 272 views
How To Cut Your Household Expenses?

How To Cut Your Household Expenses?

by SwiftHeroine
0 like 0 dislike
1 Comment 207 views
How to Increase Your Credit Card Limit?

How to Increase Your Credit Card Limit?

by Amigod
0 like 0 dislike
1 Comment 190 views
How to repair your credit?

How to repair your credit?

by VirtualAssassin
0 like 0 dislike
0 comments 141 views
How to improve your credit score?

How to improve your credit score?

by SwiftHeroine
0 like 0 dislike
1 Comment 302 views
How to buy an airline credit card?

How to buy an airline credit card?

by Sumogre
0 like 0 dislike
1 Comment 256 views
How To Get Approved For A Student Credit Card?

How To Get Approved For A Student Credit Card?

by FoolishJaguar
0 like 0 dislike
0 comments 183 views
How To Apply For Business Loans?

How To Apply For Business Loans?

by Conjursa
0 like 0 dislike
1 Comment 222 views
How to apply for a car loan?

How to apply for a car loan?

by KeyboardPie
0 like 0 dislike
1 Comment 225 views
How Much Does Your Personal Loan Cost?

How Much Does Your Personal Loan Cost?

by BouncyOracle
0 like 0 dislike
0 comments 167 views
How A Loan Can Help You Fix Up Your House?

How A Loan Can Help You Fix Up Your House?

by HarmlessRose
0 like 0 dislike
1 Comment 258 views
How to cut your property taxes?

How to cut your property taxes?

by Knighttime
0 like 0 dislike
1 Comment 196 views
How to Rebuild Your Credit after Bankruptcy?

How to Rebuild Your Credit after Bankruptcy?

by FatKomodoDragon
0 like 0 dislike
1 Comment 251 views
How To Finance My Small Business?

How To Finance My Small Business?

by Amigod
0 like 0 dislike
1 Comment 205 views
How to Choose a Bank That is Right For You and Your Business?

How to Choose a Bank That is Right For You and Your Business?

by GreedyPig
0 like 0 dislike
1 Comment 193 views
How To Reduce Tax Burden For Your Small Business?

How To Reduce Tax Burden For Your Small Business?

by Herogue
0 like 0 dislike
1 Comment 215 views
How To Finance Your Government Contracts?

How To Finance Your Government Contracts?

by HairyFoal
0 like 0 dislike
1 Comment 440 views
What to Ask When Choosing a Home Equity Loan?

What to Ask When Choosing a Home Equity Loan?

by Sassassin
Connect with us:
...