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Beat Rising Rates in 10 Easy Steps
Posted September 24th, 2010
and last modified October 25th, 2010
Recently we have seen the interest rates fall as a result of the global financial crisis. Currently, we are seeing some of the cheapest interest rates of the past decade. However, if the interest rates follow the same cycle we will see them rise over the next few years to rates that are around what we have previously seen. It is important that you don’t get caught out by these rising rates when they occur. This article will give you ideas on how you will be able to beat the interest rate rises in 10 easy steps.
- Budget Now for Higher Rates. While interest rates are low now they will rise again. It is important that you know what interest rates may become so you will be able to budget for the higher rates before they occur. If you do not budget you may find that you have a loan that you are not able to afford.
- Borrow Less. One of the simplest ways to reduce how much interest you will pay is to borrow less. If you are able to borrow less money you will save a lot of money on interest over the course of the loan.
- Get Basic Home Loans. Basic home loans are loans that will come with few features. While they will come with few features, they will also come with the lowest interest rates of all the loans.
- Don’t be Fooled by Introductory Rates. Introductory rates are reduced interest rates that are offered to people for the first part of a loan. While you will save money during the beginning part of the loan you should make sure that the normal rate is not high.
- Pay Extra. While you are paying off the loan you should make as many additional repayments as you can. By making additional repayments throughout the loan you will not only reduce the value of your loan but you will pay less in interest over the course of the loan.
- Pay Loan Fees and Charges Upfront. When you begin a loan you will have to pay a lot of upfront fees. Be sure that you pay these fees with your own money and not from borrowed money. This will reduce the amount on your loan and therefore the interest that you are charged.
- Lock it in. Fixed rate loans can save you money if you lock the rates in at the right time. While the time to fix has passed you still may be able to find fixed interest rates that are competitive and you may want to consider splitting the loan to control how much you will be paying in the future.
- Consolidate Debts. Now that interest rates are on the rise you may want to consider consolidating all your debts. Instead of paying 15% – 20% on the credit card put the debt onto your home loan to save you money.
- Move to Fortnightly Repayments. Most home loans will calculate the interest daily. Therefore, the more often you put money onto the loan account the less money will owing on the loan for interest to be calculated on.
- Take Advantage of Redraw. If you have a redraw facility you should take advantage of it. The best way to use a redraw facility is to deposit you wage into the loan account and use your credit card over the month. Therefore, while the money is on the account you will have less interest charged to the account.
Related posts:
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- Best Home Loan Rates
- Rising Rates will cost Households $3.34 billion in 2010
- Smart Ways to Beat Rate Rises and Mortgage Stress
- Beat Home Loans Rate Beater
- How Investors Can Benefit from Rising Interest Rates
- If Rates Rise, Should I Move to a Fixed Rate Mortgage
- Don’t Get Caught Out With Interest Rates Increases
- Beat Home Loans Beat Options
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