Learn about interest rate with Mon Petit Prêt
The interest rate is the cost of borrowing and the reward for saving. It is presented as a percentage of the total loan amount. The higher the interest rate, the more you will have to pay, while a low interest rate means more savings.
However, the interest on the loan is not the only factor to consider. You have to take into account the inflation rate. If you think the subject is complicated to understand, in this article we will better clarify about the interest rate for when you need to apply for a personal loan. Let’s get started!
What is the interest rate?
Simply put, interest rates are the amount of money you pay over a certain period of time on the money you borrow. The total amount you will pay is based on the principal amount, the interest rate and the frequency of compounding, as well as the length of time you borrow the money.
You should know that interest rates differ depending on the financial institution and the country where you live. Therefore, in order to know what your interest rate will be, you must calculate certain factors that influence the final result to be paid.
Types of interest rates
In the world of finance, there are several types of interest rates available. Among them are the following:
- Fixed rates: The interest rate remains the same for the life of the loan. This makes fixed interest rates more suitable for people who want stability when planning their finances.
- Variable rates: Interest rates for variable rate loans are based on a benchmark, index or market rate. That is, they are rates that will keep varying and sometimes payments may be low or have a high payment rate, depending on the Bank of Canada.
- Blended interest rate: This refers to the fact that the rate may vary during the loan period, i.e., it may start with a fixed rate and then move to a variable rate at the end of the loan.
- Credit interest rate: This is especially for investors, where they deposit money in a product and it is remunerated according to the interest rate (simple or compound).
- Lending rates: this bank interest rate refers to the price that the debtor pays to his lender for holding capital. These can be divided into nominal rate and real rate.
- Deposit rates: Refers to the interest rate that financial institutions pay depositors for their savings.
How are interest rates on loans set?
Interest rates are set according to the borrower’s risk factor, which is determined by credit rating. Borrowers with credit scores above 710 are considered excellent risk, while those with lower scores are considered high risk. This is the process lenders use to assess the principal risk of the loan and avoid losses on both sides.
What interest rates does Mon Petit Prêt offer for those who wish to borrow money?
- You can purchase $250 with a 2-month repayment term: Collection fee: $2, final credit rate: 22.5% and interest: $3.65.
- Choose $350 with a 3-month repayment term: Collection fee: $3.00, final credit rate: 22.5% and interest: $9.55.
- Select $500 with a 3-month repayment term: Collection fee: $3.00, final credit rate: 22.5% and interest: $15.25.
- 600 with a repayment term of 4 months: Collection fee: $4.00, final credit rate: 22.5% and interest: $37.77.
- $700 with a 4-month term: Collection fee: $4.00, final credit rate: 22.5% and interest: $30.28
- $750 with a 4-month repayment term: Collection fee: $4.00, final credit rate: 22.5%, interest: $35.05
Of course, these are just some of the services available at Mon Petit Prêt, but if you would like more information on available loans and interest rates, please contact us at firstname.lastname@example.org or call us at 581 994-0304.
On the other hand, if you want to apply for a secure and immediate loan, then you can fill in your information in the following form. Read our conditions and share with us your information to complete the process, we solve your financial problems!