What is the interest rate?
The interest rate is defined as the price paid for the use of money, for a certain period of time.This price refers to a percentage of the money transaction takes place. In the event that the case of a deposit, then the interest rate will refer to the salary received by the institution or person paying the money to another person or company.
Interest rates can not be any amount you decide to impose, but it is an amount that the Central Bank of each country sets the other banks, which, in turn, the set of those, for example, they applying for credit. Thus, a good example is what happens in a generic way, where the Superintendency of Banks and Financial Institutions sets a maximum interest rate for conventional loans. This amount is the maximum that can be reached as the interest rate for all institutions that charge, and if it exceeds that amount, a penalty will be dictated by the law of that country.
Several types of interest rate and different values are applied depending on who the copper. It is because of this, that when a loan or credit, it is the responsibility of the consumer or borrower, investigate about all that the financial market offers because they get a service from a bank or an institution financial, that charges high interest rates could increase your debt in a very meaningful.Thus, and as already mentioned, each time you want to make a large project, it is best to seek advice from people expert in the subject, and thus avoid the appropriations requested overpay or be burdened by debts that come mostly , the high interest rates that were not considered in the beginning, and that raise the monthly fees greatly.