Interest Rate: What Is It?
The interest rate is the amount that a lender charges when a borrower takes out a loan. Technically, the interest rate is the annual percentage rate or APR placed on top of the actual loan balance. Although lenders have their way of deciding on the amount of interest rates they can charge, these are usually based on the rates prescribed by the Reserve Bank of Australia. Given such, interest rates are expected to go up or go down.
Interest Rate Types
The most common types of interest rates are the following.
- Variable Interest Rate
The variable interest rate charged on loans is heavily dependent on the cash rate that the Reserve Bank of Australia sets. The loan interest goes up when the cash rate increases. On the other hand, the loan interest goes down when the cash rate decreases. As a result, the loan repayment amount becomes variable. It either increases or decreases, depending on the current interest rate.
- Fixed Rate
As its name suggests, the fixed-rate interest rate is fixed and remains unchanged over a particular period which is usually within 1-5 years. This type of interest is not dependent on the cash rate. Instead, it protects borrowers against it.
- Split Loan
A split loan allows borrowers to divide their loans into two parts. Technically, the first part is charged with a variable interest rate, whilst the other is fixed. Given this setup, the borrowers are allowed to pay the loan off with reduced interest rates.
Why Should You Choose Mango Credit?
Mango Credit is among the few lending institutions in Australia that offer lower and competitive interest rates. Since 2001, we have made a bold move to create a new lending standard that positively impacts borrowers and investors. Considering the said commitment, Mango Credit has offered customised and realistic financing solutions to first-time borrowers and existing customers based on their financial needs.
Presently, Mango Credit offers the best interest rate for bridging loans which starts from 1% per month. Meanwhile, the interest rate tied to the business loan we provide begins at 1% per month.
Disclaimer: The interest rates of Mango Credit are precise at the time of publishing and are subject to change. To confirm the latest interest rates at the time of your application, don't hesitate to get in touch with us. All details written on this page are general in nature and do not consider any of your personal circumstances.