All types of interest rates vary frequently, and they may even change from day to day. The main types of loans are mortgage loans, home equity loans, car loans, personal loans, and student loans. The interest rates on all of these loans vary greatly, and they often change weekly or monthly, and they could even change from day to day.
Mortgage loans are currently around 5.02 percent for a 30 year fixed loan with an interest rate that will stay the same for the remainder of the loan. There are also very large mortgages that are referred to as jumbo mortgages – those over $417,000. The 30 year fixed-rate loan is currently 5.54 percent on these loans. Customers who are seeking a 5/1 ARM will pay an average of 3.60 percent for their interest rate. Homeowners who plan to refinance their houses will pay an average of 5.05 percent for a 30 year fixed refinance mortgage.
Home equity loans are available at many financial institutions. One large national bank is offering all-time low home equity loan interest rates of 2.99 percent. If a homeowner has $50,000 equity in their home, they can take out $20,000 cash at the time of the closing. The bank will waive annual fees, and there is no closing cost for this loan.
The best car loans go to those with credit scores that are 700 or above. With 0 percent down payment, the interest rate for these customers for either 66 or 72 months is 6.50 percent. If a customer with a credit score of 700 or above wants to pay off their car and put no down payment on it, they will only pay 6.00 percent interest. Having low credit scores will definitely cost the car buyer more money because those with credit scores from 650-699 with a 10 percent down payment will pay 7.50 percent. The most expensive new car loans are for those with credit scores of 649 or below who will need to put 15 percent down, and they will pay 8.50 percent for a loan of only up to 48 months.
Used car buyers pay even higher interest loans, which range from 7 percent to 9 percent, depending on the buyer’s credit rating. Those who want to finance older cars, from 2009 models down to 2005 and earlier will often need to pay anywhere from 6.991 percent to over 12 percent interest on their car loans.
Other financial institutions are charging much lower rates for new cars of around 5.75 percent for new car loans that are 60 months or less. Other banks have new car loans for only 3.50 percent for new cars. The great difference in interest rates means that buyers need to shop around for the best deal on a loan, as well as for a good deal on a car.
Personal loans were hard to find during the past two years, but some financial institutions have begun offering them once again. The advantage of a personal loan is that it does not require collateral. The interest rate is a fixed one for the life of the loan. Those with not-so-good credit may also qualify, but they will need to pay much higher interest rates. Most personal loans are for one to five years, and interest rates for personal loans are around 12 percent.
The last type of loan is the private student loan, which are loans offered by banks and private lending institutions rather than by the federal government. These student loans are credit-based and have nothing to do with financial need. Most of these loans allow 15 years for repayment, and payments do not begin until six months after graduation. Interest rates are based on credit ratings, and they vary from the prime rate plus 0.20 percent to the prime rate plus 7.70 percent.
