Article: Getting a lower interest rate is usually just a matter of negotiating. To be successful, all you have to do is come prepared. Know how much money you want, how much interest you'd like to pay, and what rate is going to be too high for you to make a deal before walking in or calling up. Financially stable people with decent (650+) credit scores have the best chance to negotiate rates. Call up your credit card company and let them know that you've found better rates on other cards. If you're a regular customer who pays on time, they will likely try to keep your business. Talk to your banker about the lowest possible rate they can give. Research other options so you can point to other offers. Be wary of variable APR or interest -- it may look appealing at first, but these "deals" often turn into exorbitantly high interest rates after 1-2 years. The accrual rate determines when interest is added to principal. So, if it is really high (such as daily) it means that whatever interest is unpaid at the end of the day gets added to principle. This means the next month's interest payment will be even higher since you have a higher principle. For example, note how a $100,000 loan with a 4% interest rate is compounded three different ways: Yearly: $110,412.17 Monthly: $110,512.24 Daily: $110,521.28 Remember that interest is taken as a percentage of principle. Simply said -- the more you owe, the more money you pay in interest. If you can pay off some of the principle every month along with the interest, you may not lower your rate. But you will definitely lower your payments. Interest can be thought of as the cost of borrowing money. Either you pay someone for it, or your bank pays you to "borrow" the money in a savings account. Either way, you should know the rates before signing any paperwork. Auto: 4-7% Home: 3-6% Personal Loans: 5-9% Credit Cards: 18-22% Payday Loans: 350-500% . The safer an account is, like a savings account, CD, or bond, the less money it usually returns in interest. That said, this sort of guaranteed, but slow growth, can be powerful when saving for retirement. Other accounts with higher interest rates will make you more money, but with more associated risk or stipulations attached. Savings Accounts: 1-2% CD 1-2% US Bonds (over 30 years): 3-4% 401k & IRA: 6-10%
What is a summary of what this article is about?
Talk to your bankers to negotiate a lower interest rate. Choose a less-frequent accrual rate to pay less in interest. Pay more than your interest whenever possible, no matter the interest rate. Monitor common interest rates before getting a loan. Know the interest rates on any investments to money wisely.