Interest Rates
In most cases, when individuals apply for a loan, they are required to pay a predetermined interest rate, which is a percentage of the entire loan. Each month the loan accrues more interest, making the borrower pay the lender more than what was borrowed. When calculating interest rates, lenders consider several factors.
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Calculating Interest
When applying for a loan, borrowers must provide extensive information about their credit histories and the nature of the loan in question. Lenders want to be as certain as possible that the borrower will repay their debts, so they take into consideration the following factors:
- Borrower’s cash flow, or income minus expenses
- Borrower’s credit history
- The nature of the loan, or what it will be used for
- The amount of the loan
- Current market/economy
If approved, the lender will determine an interest rate. Generally, interest rates fall between 5 and 15 percent. The amount you must repay increases each month, as your loan accrues interest.
Contact Us
Frequently, people are unable to repay their loans due to unrealistically high interest rates. If you are struggling to repay your debts, contact a West Palm Beach bankruptcy attorney at the law office of Eric N. Klein & Associates, P.A. today by calling 561-353-2800.
