Interest rate – John Hesch http://johnhesch.com/ Thu, 16 Sep 2021 08:52:00 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://johnhesch.com/wp-content/uploads/2021/07/icon-150x150.png Interest rate – John Hesch http://johnhesch.com/ 32 32 SBI reduces the interest rate on home loans to 6.7% for any amount, with no processing fees. Know more https://johnhesch.com/sbi-reduces-the-interest-rate-on-home-loans-to-6-7-for-any-amount-with-no-processing-fees-know-more/ Thu, 16 Sep 2021 08:52:00 +0000 https://johnhesch.com/sbi-reduces-the-interest-rate-on-home-loans-to-6-7-for-any-amount-with-no-processing-fees-know-more/ The State Bank of India (SBI) on Thursday cut mortgage interest rates to 6.7% for any loan amount. This is the first time that a bank has granted flat rate home loans, the lender said. The latest offer from the nation’s largest lender aims to encourage homebuyers ahead of the holiday season. Explaining how this […]]]>

The State Bank of India (SBI) on Thursday cut mortgage interest rates to 6.7% for any loan amount. This is the first time that a bank has granted flat rate home loans, the lender said. The latest offer from the nation’s largest lender aims to encourage homebuyers ahead of the holiday season.

Explaining how this one-of-a-kind initiative will benefit home buyers, SBI said a buyer must pay 7.15% interest to qualify for a Rs 75 lakh home loan. With the introduction of the festive offers, the home loan will be available at an interest rate of 6.7%. “The offer translates into a saving of 45 basis points, which translates into a huge interest savings of over Rs 8 lakh, for a loan of Rs 75 lac with a term of 30 years,” said SBI.

Previously, the interest rate on home loans was different for employed and non-salaried homebuyers. Non-salaried borrowers had to pay higher interest rates than their salaried counterparts. “From now on, no interest premium linked to occupancy is charged to potential borrowers of mortgage loans. This would lead to a new interest saving of 15 basis points for non-salaried borrowers, ”the bank said.

“Generally, concessional interest rates are applicable for a loan up to a certain limit and are also linked to the profession of the borrower. This time, we have made the offers more inclusive and the offers are accessible to all segments of borrowers regardless of the loan amount and the borrower’s profession, ”said CS Setty, Managing Director (Retail & Digital Banking ), SBI.

On how this will benefit mortgage borrowers, Anuj Puri, chairman of ANAROCK Group, said: “This is a hugely competitive decision that removes virtually all previous limitations that applied to special loan interest rates. real estate. Instead of focusing only on budget housing, this new interest rate is genuinely democratic, as buyers from every budget band will benefit. “

To encourage homebuyers ahead of the holiday season, the lender has also announced that it is waiving processing fees. There will also be a concession on mortgage interest rates based on the borrower’s credit rating, the bank said. The same interest rate will apply for those who plan to transfer their mortgage from other banks to the State Bank of India.

“This lending rate will also not limit which cities will benefit from it – in previous preferential rates limited to budget housing, only tier 2 and tier 3 cities could really benefit. With this democratized interest rate, SBI is also responding to the huge demand for housing in the subways. This move is timely, coinciding with the start of the holiday season, ”added Puri.

Exemption from processing fees and interest premiums linked to occupation are additional savings levels. Cumulatively, this package is the most attractive deal ever offered by a home loan lender, ”he added.

“We believe zero processing fees and great interest rates during the holiday season will make homeownership more affordable. Our country has shown tremendous resilience during the pandemic. As every Indian’s banker, we are committed to doing our part to revive the economy by enabling housing for all, ”concluded Shetty.

Read all the latest news, breaking news and coronavirus news here


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Super trumps bank savings in a low interest rate environment https://johnhesch.com/super-trumps-bank-savings-in-a-low-interest-rate-environment/ Sat, 11 Sep 2021 12:00:00 +0000 https://johnhesch.com/super-trumps-bank-savings-in-a-low-interest-rate-environment/ If you are planning to apply for the old age pension at 67, remember that your wife’s full-time job will be counted by means tests, which will also consider your super income to earn. If the total exceeds the maximum threshold – currently $ 3,192.40 per fortnight, or $ 83,002 per year – you will […]]]>

If you are planning to apply for the old age pension at 67, remember that your wife’s full-time job will be counted by means tests, which will also consider your super income to earn.

If the total exceeds the maximum threshold – currently $ 3,192.40 per fortnight, or $ 83,002 per year – you will not get a partial pension.

You may find it helpful to work longer.

Make sure you get two or three quotes for your renovations and choose a reputable builder. And since renovations usually go over budget, don’t plan for excess money until they’re completed.

You then need to make sure you have enough money to cover your daughter’s educational needs.

Once you have decided what is really excess in your funds, add it to your wife’s super.

As she is younger, her super will be ignored by Centrelink until she too turns 67.

You need about three times your current combined benefits after you both retire.

I’m 65, work one to two days a week, and earn $ 240 to $ 350. I have $ 7,000 super plus $ 130,000 in Transition to Retirement Pension (TTR), paying $ 280 bi-weekly. My wife, 63, works full time and earns $ 1,800 a fortnight. She has $ 250,000 super plus $ 25,000 in a TTR fund paying $ 58 bi-weekly. I have half of three properties, one valued at $ 950,000 with a mortgage of $ 380,000 and the others valued at about $ 1.3 million with mortgages of $ 750,000. We plan to sell the first property and keep the other two tenants. Our personal debt is a $ 90,000 renewal facility that costs $ 395 per month and a car loan with a repayment amount of $ 39,000. Do I have to repay the car loan on my TTR fund and keep the withdrawal facility, because it is tax deductible? BL

I am a little confused.

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If the $ 90,000 debt is a mortgage on the property you are selling, it will not be tax deductible if it is not held as a loan intended to produce taxable income. Also, the lender will likely ask you to erase it during settlement.

If you walk away with half of some $ 570,000, or $ 285,000 before capital gains tax, you should be able to write off both personal loans, which I would recommend, rather than lowering your super. advantages.

  • The advice given in this article is general in nature and is not intended to influence readers’ decisions regarding investments or financial products. They should always seek their own professional advice that takes their personal circumstances into account before making any financial decisions.

If you have a question for George Cochrane, send it to Personal Investment, PO Box 3001, Tamarama, NSW, 2026. Help lines: Australian Financial Complaints Authority, 1800 931 678; Centrelink pensions 13 23 00.


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BSP engages low interest rate regime as pandemic persists in PH https://johnhesch.com/bsp-engages-low-interest-rate-regime-as-pandemic-persists-in-ph/ Thu, 09 Sep 2021 09:05:00 +0000 https://johnhesch.com/bsp-engages-low-interest-rate-regime-as-pandemic-persists-in-ph/ MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) on Thursday (September 9) assured financial markets that borrowing costs will remain low to help the country’s economic recovery, as more influential monetary regulators abroad prepare for increase interest rates to avoid inflation. In an online briefing, BSP Governor Benjamin Diokno released the latest “forward guidance” […]]]>

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) on Thursday (September 9) assured financial markets that borrowing costs will remain low to help the country’s economic recovery, as more influential monetary regulators abroad prepare for increase interest rates to avoid inflation.

In an online briefing, BSP Governor Benjamin Diokno released the latest “forward guidance” – outlining the likely future direction of monetary policy based on the latest economic data and assessments – and reiterating “the agency’s commitment to maintain adequate political support for as long as needed.” to ensure the sustainability of the economic recovery.

“The emerging prospects of manageable inflation and nascent growth allow the BSP to maintain its accommodative monetary policy to help strengthen domestic demand and support business and consumer confidence, thus facilitating the growth momentum to gain momentum. ground in the coming months, ”he said. .

Diokno noted, in particular, that the anticipated normalization of US monetary policy has raised some concerns about its implications for financial markets, especially for emerging economies.

Nonetheless, the US monetary authorities have provided appropriate signals to guide the expectations of financial markets, allowing market participants to better integrate potential adjustments in monetary conditions in the world’s largest economy and to avoid unnecessary market reactions and disruptive.

More importantly, the Philippine economy is also well positioned to cope with an environment of tighter global financial conditions in the event of a US monetary tightening, given the macroeconomic fundamentals of the economy and the continued availability of leeway. authorities, Diokno said.

Against the backdrop of a more challenging global economic environment, he said the BSP remains focused on preserving the appropriate stance of monetary policy in the face of emerging risks to the outlook for recovery, including possible fallout from external developments. that can affect the dynamics of domestic inflation, capital flows, and the exchange rate.

“The PASB will continue to communicate carefully its future political intentions to reduce uncertainty and promote a faster and more sustainable recovery,” assured the head of the PASB.

Despite repeated assurances from the agency, however, Philippine bank loans contracted for the eighth consecutive month in July as borrowers and lenders continued to turn away from the debt market, but the BSP hoped for a possible reversal, noting that the rate of decline in lending is slowing.

Preliminary data showed that outstanding loans from universal and commercial banks, excluding banks’ short-term deposits with the regulator, fell 0.7% year-on-year in July after declining 2% in June.

On a monthly seasonally adjusted basis, outstanding universal and commercial bank loans, net of short-term bank deposits, increased 0.5%.

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4% interest rate for members of PNG Nambawan NSLS Credit and Savings Society https://johnhesch.com/4-interest-rate-for-members-of-png-nambawan-nsls-credit-and-savings-society/ Sun, 05 Sep 2021 20:00:00 +0000 https://johnhesch.com/4-interest-rate-for-members-of-png-nambawan-nsls-credit-and-savings-society/ Members of the Nambawan Savings and Loans Society (NSLS) will receive a 4% lending rate on their savings accounts for fiscal 2020. Chairman and CEO John Solok. said the 4% credit rate was a 3% increase over the 1% normally credited to members each year. It comes after the NSLS recorded a turnover of K […]]]>

Members of the Nambawan Savings and Loans Society (NSLS) will receive a 4% lending rate on their savings accounts for fiscal 2020.

Chairman and CEO John Solok. said the 4% credit rate was a 3% increase over the 1% normally credited to members each year.

It comes after the NSLS recorded a turnover of K 6.7million last year, which is a 21% increase from 2019 with a net profit of K 2.38million.

Other highlights include 24% growth in net assets worth K12.2 million, the strongest membership growth of 26,633 – growth of 20.1% and 24% loan increase.

Solok said revenue increased because the NSLS looked at other sources of revenue besides traditional interest rates on customer loans.

“One of the things about savings and loans is that members help members.

“We don’t charge huge fees, if you send us a declining balance you have 1% interest on your loan, which is by financial standards the cheapest in the market,” Solok said.

He said it was about having the money to help members without putting too much pressure on their repayments.

“We, those with access to liquidity, are looking to increase their wealth, so we are looking at wise investments in short-term money markets,” Solok said.

He said the strategic move recently was to buy cheap blue investments like in Kina Bank.

Solok said their growth now depends on interest rates by increasing other investments to ensure they grow with a high return on their investment.

Exeprenuer Magazine / PNG today

Next: SP PNG hunters show value in lessons learned with 22-20 win over central Queensland Capras


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Government estimates public debt to skyrocket thanks to high interest rates https://johnhesch.com/government-estimates-public-debt-to-skyrocket-thanks-to-high-interest-rates/ Fri, 03 Sep 2021 01:00:00 +0000 https://johnhesch.com/government-estimates-public-debt-to-skyrocket-thanks-to-high-interest-rates/ ISLAMABAD: The Ministry of Finance came forward to explain the reasons for the increase in public debt over the past three years and explained that the rise in interest rates has led to a sharp increase in debt service which consumed 7,500 billion rupees, we learn. The depreciation of the exchange rate, the financing of […]]]>

ISLAMABAD: The Ministry of Finance came forward to explain the reasons for the increase in public debt over the past three years and explained that the rise in interest rates has led to a sharp increase in debt service which consumed 7,500 billion rupees, we learn.

The depreciation of the exchange rate, the financing of the primary deficit and the cash management plan have also increased public debt.

It is relevant to mention here that Pakistan’s total public debt and liabilities swelled to 47.8 trillion rupees until June 30, 2021 from 29.6 trillion rupees at the end of June 2017-2018, when the government led by the PML (N) had completed its five-year term. to reign.

Public debt and liabilities stood at Rs 6 trillion at the end of Musharraf’s reign in 2007-08. Then the PPP ruled over the next five years and they rose to 14 trillion rupees. Then the total public debt jumped by 14.6 trillion rupees and rose to 29.6 trillion rupees at the end of the PML (N) rule in 2017-18.

In the last three years of the PTI-led government, total public debt and liabilities have increased by at least Rs 17.8 trillion, making it the largest ever increase in the debt burden. over a three-year period.

However, the finance ministry in its statement said it was in response to some media reports regarding the increase in public debt over the past three years, while those media reports ignored the underlying reasons. of this increase.

Therefore, in order to fully understand the underlying economic realities, it is necessary to analyze the sources of the increase in total public debt over the past three years:

The preference for short-term domestic borrowing in the absence of adequate liquidity reserves resulted in a short-term profile of domestic debt at the end of fiscal 2018. This short-term profile resulted in interest charges. high on debt, as interest rates had to be raised significantly to curb mounting inflationary pressures. The government paid 7.5 trillion rupees in interest service, which accounts for 50% of the increase in total public debt.

The exchange value of the rupee has been kept at an artificially high level in the past, which triggered the balance of payments crisis. The transition to a market-based exchange rate regime, being an inevitable policy choice, resulted in a sharp depreciation of the exchange rate resulting in high inflation, high interest rates, slower GDP growth and a decline. tax revenue related to imports. This exchange rate depreciation added about Rs.29 trillion (20% of the increase) to government debt. It is important to stress here that this increase was not due to borrowing but to the revaluation of the external debt in rupee terms after the devaluation of the currency.

The impact of the economic slowdown due to the Covid-19 pandemic has mainly resulted in higher than expected primary deficits and around 3.5 trillion rupees (23% of the increase) has been borrowed to finance the primary deficit. As much as Rs 1.0 trillion (7% of the increase) was due to increased government cash balances to meet emergency needs as well as the difference between face value (which is used for l ‘recording of the debt) and the amount realized. value (which is recorded as budgetary revenue) of government bonds issued during this period. The government took the revolutionary and economically sound step of not borrowing from the SBP and maintaining a cash reserve, which led to a one-time increase in debt. However, this increase in debt was offset by a corresponding increase in the government’s liquid cash balances.

A better way to measure the level of debt is to use the debt-to-GDP ratio instead of looking at the absolute values ​​of debt. With this in mind, it is important to point out that Pakistan experienced one of the smallest increases in its debt-to-GDP ratio during the pandemic. The global debt-to-GDP ratio increased by 13 percentage points, while Pakistan’s debt-to-GDP ratio registered a minimum increase of 1.7 percentage points in 2019-2020.

Pakistan’s debt-to-GDP ratio has in fact been reduced by 4 percentage points, indicating a lower debt burden at the end of June 2021 compared to the previous year.

To conclude, the increase in debt over the past three years has occurred mainly in the 2018-19 fiscal year due to the implementation of difficult and unavoidable policy choices. If the market-based exchange rate, a sustainable level of current account deficit, adequate liquidity reserves and a long-term domestic borrowing profile had been maintained, the debt burden would have been further reduced through the efforts. fiscal consolidation supported by aggressive spending controls and growth in tax and non-tax revenues.

As most of the major adjustments in fiscal and monetary policies have been made, the debt burden is expected to decline sharply over the next few years, the statement concludes.


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Is this the best interest rate in Australia for sea and tree changers? https://johnhesch.com/is-this-the-best-interest-rate-in-australia-for-sea-and-tree-changers/ Thu, 02 Sep 2021 22:07:17 +0000 https://johnhesch.com/is-this-the-best-interest-rate-in-australia-for-sea-and-tree-changers/ One of the biggest names in customer-owned banking, BCU, has launched a new rate that seems perfectly tailored for the growing tree-changers demographics. Tree changers are a major driver of Australia’s real estate market, representing a demographic shift that has seen professionals leave cities for the country as the pandemic has made working from home […]]]>

One of the biggest names in customer-owned banking, BCU, has launched a new rate that seems perfectly tailored for the growing tree-changers demographics.

Tree changers are a major driver of Australia’s real estate market, representing a demographic shift that has seen professionals leave cities for the country as the pandemic has made working from home part of the new normal.

BCU’s new rate rewards those with a Loan to Value Ratio (LVR) below 60%, which includes a large chunk of those who sell high priced properties in Sydney and buy more reasonably priced homes in the city. Regional Australia.

Those with 60% or less LVR can access a variable rate of 2.29%, while the next level, 60-80%, will get 2.39% BCU.

Speaking to Australian Broker, BCU chief executive Michael Ribbens said tree changers were a key demographic in Coffs Harbor, where the bank is based.

“We see a lot of this,” he said. “There are a lot of people in Sydney and Melbourne who can work from home and wonder why they have to pay a massive mortgage in the city when they can live in Coffs Harbor, Port Macquarie or one of these. regions and probably sell their house. and have a smaller mortgage obligation. :

“The challenge for brands like ours is that the average person in Sydney might not know who BCU is. By the time they enter town, they will certainly know about us. But they might come up with their own home banker, who will no doubt try to help them with their next home in this area. “

“I think over time, as they hear our publicity and see what our proposition is for the members, they will give us serious consideration. We’re seeing a lot of refinancing opportunities that we’re getting from people in Sydney, and with our latest $ 5,000 cash back offer, it’s a compelling proposition.

The rate itself is one that is rarely seen in the market.

“We’ve always had a popular OMG product, and although the title is a competitive 2.44%, we decided we wanted to reward our members who have a lower LVR,” said Ribbens.

“We created these two lower levels, 60-80% and lower than 60%, and because the risk profile of those is different, so we thought the cost should be too. “

“We thought we would be proactive and really help the members who, especially in the days of Covid, are doing it hard. It’s a great way for us to show that being with a mutual is a great way to save money and that our only goal is to make members’ financial dreams come true.

“There are a few players who offer this, but not a lot. You won’t see it being advertised very heavily in the market, although I know a few other players are offering it. “

Brokers are often quick to jump on deals that can see simple loans approved quickly and at a good rate for their client.

“Brokers have a duty to give their clients the best deal they can find, and we can make it easy for them as well,” said Ribbens. “Price is a part, but getting the transaction through the organization is just as important to the broker and his client.”

“This is where we work very hard to make sure we have smooth processes, and with competitive pricing, this should be a winner for all parties.”

Customer-owned banks may be in a unique position to provide these rates and offers.

“Each of the brands that exist in Australia has its unique positioning,” explained Ribben. “Whether it’s their heritage or their presence in a local market, and one of the things I’ve learned across New South Wales and South Queensland is that every city is different.”

“There are brands that are powerful in certain cities and at BCU we have certain areas of the core where we are a household name and most of the people in the city would know us and probably would have had an account with us.”

“We like the idea that the BCU brand can be adopted by the local community and we try to advertise profitably so as not to spend too much money on marketing, but we get enough profile for the member to can experience what we believe to be a unique service.

Read more: How a customer-owned bank fixes the lowest interest rate in Australia


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Turkish central bank hints at lower interest rates, investors say https://johnhesch.com/turkish-central-bank-hints-at-lower-interest-rates-investors-say/ Thu, 02 Sep 2021 12:08:06 +0000 https://johnhesch.com/turkish-central-bank-hints-at-lower-interest-rates-investors-say/ The Central Bank of the Republic of Turkey (CBRT) has hinted that it is approaching an interest rate cut and its governor has not reiterated its past pledges to maintain a strict policy on the inflation during a conference call Wednesday, several investors who participated in the call mentioned. Şahap Kavcıoğlu did not mention the […]]]>

The Central Bank of the Republic of Turkey (CBRT) has hinted that it is approaching an interest rate cut and its governor has not reiterated its past pledges to maintain a strict policy on the inflation during a conference call Wednesday, several investors who participated in the call mentioned.

Şahap Kavcıoğlu did not mention the two promises made in previous calls and policy statements – that the policy rate would stay above inflation and that a strict policy would be maintained decisively – investors were cited by Reuters.

Eight foreign and local investors said they interpreted the comments as a change that could pave the way for a rapid cut in Turkey’s 19% key rate, which is only slightly above the inflation rate.

In recent weeks, analysts had expected easing to begin towards the end of the year.

“They definitely changed the language; they dropped that promise. They expect a significant drop (in inflation), “said a foreign investor who was on one of the two calls, adding that” there was no more explicit promise “to keep rates at. above inflation.

When asked about it, the CBRT “refused to confirm or deny it,” said the source, who requested anonymity.

Consumer prices edged up to nearly 19% in July, the highest level in more than two years, keeping pressure on the CBRT to maintain a firm position.

Friday’s data should show that annual inflation in August has remained close to July’s 18.95%.

Analysts are less confident than the CBRT that inflation will subside in the coming months, and some say rate hikes are needed. Still, most expect a reduction in the fourth quarter.

“No more rate hikes are coming,” another foreign investor said on the call.

The next political meeting is due to take place on September 23.

Inflation relief

Kavcıoğlu said the policy stance will ensure a drop in inflation starting in the fourth quarter, investors said during the calls.

The monetary authority had previously committed to keeping rates above inflation. It raised its year-end inflation forecast to 14.1% last month.

The CBRT said inflation would follow a volatile course in the short term due to both supply and demand factors, and that it would monitor the impact of volatility on its monetary position.

He also said that other major central banks allow headline inflation to far exceed their policy rates, as monetary policy alone cannot resolve the price pressures associated with the pandemic.

Nilüfer Sezgin, deputy general manager of Iş Portföy in Istanbul, said the CBRT pointed out that some measures of core inflation are lower than others, especially given the high prices of food and other commodities. .

“We can expect basic indicators such as non-food prices to weigh more heavily on CBRT policy decisions. This could push the rate cut forward, ”she said.

Kavcıoğlu also said there was no need for credit growth to slow further after the recent drop, and that the CBRT was working on possible additional measures to tackle consumer lending, five sources said.

In addition, the governor told investors that the performance of the country’s vaccination campaign had a positive impact on economic activity, employment and the current account balance.

He said early data indicated that domestic economic activity, supported by external demand, followed a solid path in the third quarter.

His remarks came after data released on Wednesday showed Turkey’s economy experienced massive 21.7% year-on-year growth in the second quarter, rebounding powerfully from a sharp slowdown a year earlier driven by restrictions linked to the COVID-19.

The governor said that the current upward trend in exports, the recovery of the tourism industry and the notable drop in gold imports have supported the continued improvement in the external balance.

“We expect the current account to register a surplus for the remainder of the year,” Kavcıoğlu noted.


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What is the average interest rate on an auto loan? Depends on credit rating https://johnhesch.com/what-is-the-average-interest-rate-on-an-auto-loan-depends-on-credit-rating/ Wed, 01 Sep 2021 11:42:00 +0000 https://johnhesch.com/what-is-the-average-interest-rate-on-an-auto-loan-depends-on-credit-rating/ Personal Finance Insider writes about products, strategies, and tips to help you make informed decisions with your money. We may receive a small commission from our partners, such as American Express, but our reports and recommendations are always independent and objective. The average interest rate for new cars in 2021 is 4.09% and 8.66% for […]]]>

Personal Finance Insider writes about products, strategies, and tips to help you make informed decisions with your money. We may receive a small commission from our partners, such as American Express, but our reports and recommendations are always independent and objective.

  • The average interest rate for new cars in 2021 is 4.09% and 8.66% for used cars, according to Experian.
  • The credit rating, whether the car is new or used, and the length of the loan largely determine interest rates.
  • The average rate has fallen since the first quarter of 2020, from 5.22% for new vehicles and from 9.33%.
  • Compare up to 4 car loan offers with our partner myAutoLoan »

In the first quarter of 2021, the average rate on a car loan for a new car was 4.09%, while the typical used car loan carried an interest rate of 8.66% depending on the state of the. Experian’s auto finance market.

Interest rates are calculated taking into account many factors including your credit rating, the type of car you buy and where you live. Auto loans can be found at a dealership or by gathering pre-approvals from institutions you would like to work with, such as banks,

credit unions
, or independent lenders.

Experian data shows that the two biggest factors in your auto loan interest rate are your credit score and whether you are buying a new or used car.

Here are the average interest rates for each type of credit score for new and used car purchases, according to Experian

Average interest rates per credit score

The higher your credit score, the less it will cost you to borrow

Credit scores are a digital representation of your credit history. It’s like a score for your borrowing history ranging from 300 to 850, and includes your borrowing, requests, repayment, and a combination of credit types on your credit report. Businesses use credit scores to determine how risky they think it would be to lend you, and therefore how much they want to charge you for that privilege.

Auto loans are no exception to the long-standing rule that having a lower credit rating makes borrowing more expensive. In the data above, the cheapest borrowing rates went to people with the best credit scores. Meanwhile, those with the lowest credit scores paid around 10 percentage points more to borrow than those with the highest scores.

The interest rate also has a big effect on the monthly payment. Using Bankrate’s car loan calculator, Insider calculated how much a borrower paying the average interest rate would pay for the same new car loan of $ 30,000 over 48 months:

With the interest rate being the only factor changed, a person with a credit score in the highest category will pay $ 655 per month, while a person with a score in the lowest category would pay $ 829 per month, that’s $ 174 more per month for the same car.

Average interest rates for used cars compared to new cars

Buying second-hand could mean higher interest rates

Buying a new car can be more expensive, on the whole, than buying a used one. However, the interest rates for new and used car loans are quite different regardless of your credit score. Based on data from Experian, Insider calculated the difference between new and used interest rates. On average, financing a used car costs about four percentage points more than new financing.

The spread between the cost of financing a used car narrows as credit scores increase, but even for the best credit scores, a used car will cost over 1% more to finance than it does. ‘a new car.

Used cars are more expensive to finance because they present a higher risk. Used cars often have lower values ​​plus a greater chance that they could be totaled in an accident and the finance company could lose money. This risk is reflected in the form of higher interest rates, regardless of the borrower’s credit rating.

Average interest rates by loan term

Loans less than 60 months have lower interest rates

The terms of the loan can have an effect on your interest rate. In general, the longer you pay, the higher your interest rate.

After 60 months, your loan is considered higher risk, and there are even bigger spikes in the amount you will need to pay to borrow. The average rate for a 72-month auto loan is almost 0.3% higher than the typical interest rate for a 36-month loan. This is because there is a correlation between longer loan terms and non-payment – lenders worry that borrowers with long loan terms will not pay them back in full. Above the 60 month mark, interest rates go up with each year added to the loan.

S&P Global data for new car purchases with a loan of $ 25,000 shows how much the average interest rate is changing:

It is best to keep your auto loan for 60 months or less, not only to save on interest, but also to prevent your loan from being worth more than your car, also known as being underwater. As we age, cars lose value. This is not only a risk for you, but also for your lender, and this risk is reflected in your interest rate.

Average interest rates per lender

The lender you use makes the difference

When you start shopping for auto loans, you will find that the lender you choose makes a difference. Here are the starting interest rates from several different lenders for new and used cars.

Banks independently set their minimum borrowing rates for auto loans, so it’s important to compare offers and compare offers to see what works best for you. Get pre-approvals from several different lenders and compare APRs and monthly payments to find the deal that’s right for you.


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The BOK raises its key rate to 0.75% l KBS WORLD https://johnhesch.com/the-bok-raises-its-key-rate-to-0-75-l-kbs-world/ Tue, 31 Aug 2021 02:02:48 +0000 https://johnhesch.com/the-bok-raises-its-key-rate-to-0-75-l-kbs-world/ Getty Image Bank The Bank of Korea or BOK raised its key rate to 0.75% on August 26 from 0.5%. This is the first time in 15 months that the central bank’s monetary policy board has changed the interest rate. It is also the first time since November 2018 that the BOK has raised its […]]]>

Getty Image Bank

The Bank of Korea or BOK raised its key rate to 0.75% on August 26 from 0.5%. This is the first time in 15 months that the central bank’s monetary policy board has changed the interest rate. It is also the first time since November 2018 that the BOK has raised its key rate. The rate hike signals an exit from the “ultra-low rate policy” that the bank has maintained to effectively respond to the COVID-19 pandemic and stimulate the economy. While some emerging economies, including Brazil, have raised their key rates this year, Korea is the first major Asian economy to do so.

Meet Kim Dae-ho, director of the Global Economic Research Institute, to examine the background to the BOK’s rate hike and its potential impact on the local economy and finances.

One of the reasons for the rate hike is increasing inflationary pressure. Consumer prices rose 2.6% year-on-year in July, exceeding the government’s inflation target of 2%. In addition, the trend of low interest rates has prompted many Koreans to take out loans to invest in real estate and stocks, raising concerns about an asset price bubble and the increase in the market. household debt.

To fight rising inflation, stabilize asset prices and curb household debt, the BOK has decided to increase the primary focus on a major policy change, although this decision may weigh on small businesses. companies.

Household debt in Korea reached over 1.8 quadrillion won, or about 1.6 trillion US dollars, at the end of the second quarter of the year. This is the highest to date since the relevant data began to be compiled in 2003. Another factor behind the rate hike is confidence in the Korean economy, which is expected to grow by more than 4% this year thanks to robust exports. In addition to these internal issues, there are also external factors that influenced the BOK’s decision to raise rates.

The minutes of the US Federal Open Market Committee meeting show that the Fed will soon start to shrink. The United States has also seen an increase in house prices, inflation and household debt. Against this backdrop, the Fed hinted that it would reduce the pace of asset purchases. The US dollar has strengthened over the past month, causing the Korean won exchange rate to rise against the US dollar. South Korea raised its interest rate ahead of the United States, in an apparent attempt to reduce exchange rate fluctuations resulting from the Fed’s potential cut. If the United States increases its key interest rate, funds will flow to the United States from all over the world. Since Korea has already raised its own rate, part of the funds could come to Korea. This is why the BOK proceeded with a preventive rate hike.

Following the rate hike in Korea, borrowers will have to bear a heavier burden of debt repayment. The situation is worrying if we consider that 73% of household loans are at variable rate and not at fixed rate. This means that many indebted households are vulnerable to rising interest rates.

South Korea’s debt, including households, businesses and the nation, stands at 5 quadrillion won, or some 4.3 trillion dollars. In this situation, a rate hike of 25 basis points would translate into considerable gains on the interest payments on the debt. Unfortunately, many self-employed people are already struggling to repay their loans and pay their rent due to strict social distancing rules. These groups will face an even greater burden. For companies that export their goods, rising interest rates will cause them to lose price competitiveness.

Many analysts predict that rising rates will not immediately curb the surge in household debt and house prices. Indeed, many households still need to obtain loans for a variety of reasons, while expectations of rising asset prices are still high enough to offset the growing interest burden resulting from rising interest rates. 0.25 percentage point.

But others say we have to wait and see the effect of the recent rate hike, as the rate decision sent a clear signal to economic players that the era of ultra-low interest rates is over. In addition, additional rate hikes are planned.

BOK Governor Lee Ju-yeol has spoken strongly of the possibility of further rate hikes. But he said the central bank would consider when and how much to adjust rates taking into account various factors, including the development of the pandemic situation and vaccinations. Another big factor would be monetary policy changes in the United States, which are expected to raise their interest rates next year. If the United States starts declining sooner than expected, Korea will be in a hurry to raise its own rate. If the United States slowly hikes rates, Korea will follow suit.

Clearly, Korea and the United States are heading for monetary tightening.

After the end of the global financial crisis in 2010, the BOK raised the interest rate five times in the space of just one year. He could take similar action when the COVID-19 crisis is over. The Korean government and financial authorities must now devise measures to ensure a soft landing for the market in an era of higher interest rates.

Most economists agree that rate hikes are inevitable in light of macroeconomic conditions and the global economic situation. But even though Korea’s economy is improving overall, some businesses have already been hit unexpectedly by the pandemic. In addition to rate hikes, financial authorities must adopt appropriate measures to address the problems of distressed groups, such as delayed loan repayments.

It is also important to raise the interest rate little by little so that the market can prepare for the change. When formulating monetary policies, financial authorities should take into account households and small traders exposed to the risk of rising interest rates. For example, a new policy may allow these vulnerable groups to switch from variable rate loans to fixed rate loans.

In the process of overcoming the pandemic and normalizing the economy and finances, the government, financial authorities and the central bank should be able to come up with thoughtful policies in cooperation to minimize the negative impact of the pandemic on groups. vulnerable. .





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StanChart applauds RBZ for keeping interest rate on loans at 10% https://johnhesch.com/stanchart-applauds-rbz-for-keeping-interest-rate-on-loans-at-10/ Mon, 30 Aug 2021 01:56:14 +0000 https://johnhesch.com/stanchart-applauds-rbz-for-keeping-interest-rate-on-loans-at-10/ STANDARD Chartered Zimbabwe (Stanchart) applauded the Reserve Bank of Zimbabwe (RBZ) decision to keep loan interest rates at 10%, saying the move will go a long way in boosting industrial productivity. The medium-term monetary policy statement issued by the RBZ recently indicates that the bank’s overnight accommodation rate of 40% and the medium-term lending rate […]]]>

STANDARD Chartered Zimbabwe (Stanchart) applauded the Reserve Bank of Zimbabwe (RBZ) decision to keep loan interest rates at 10%, saying the move will go a long way in boosting industrial productivity.

The medium-term monetary policy statement issued by the RBZ recently indicates that the bank’s overnight accommodation rate of 40% and the medium-term lending rate for the productive sector of 30% will be maintained in the short term. , in order to control the money supply and curb speculative activities.

The document states that a cap on the interest rates at which banks can on-lend the proceeds of the medium-term lending facility would also be kept at 10% above the lending rate.

Presenting financial performance for the six-month period ended June 30, 2021, StanChart Managing Director Ralph Watungwa welcomed the move, agreeing with the central bank that it will go a long way in boosting economic growth.

“We welcome the decision to maintain the current monetary and fiscal policies which will promote economic stability at least until the end of the year. Notably, the 2021 medium-term monetary policy statement maintained interest rates for overnight housing and medium-term loans for productive sectors in order to control the money supply.

“The ceiling on interest rates at which banks can lend drawings has been kept at 10% above the borrowing rate to stimulate the recovery of productive sectors of the economy,” he said.

This development comes at a time when capacity utilization in the manufacturing sector is expected to reach 61% by the end of 2021, up from 47% last year.

Meanwhile, during the period under review, StanChart made an after-tax profit of $ 632 million, compared to $ 682.4 million in a comparative period last year.

“The quality of the loan portfolio has remained strong despite the disruptions caused by the Covid19 pandemic. The NPL ratio was significant at 0.002%, up from 0.005% as at December 31, 2020, ”said Lovemore Manatsa, Chairman of the Board of StanChart.

He added that the balance sheet remains strong, very liquid and well capitalized against minimum regulatory requirements. – Newzim


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