How Interest Rates and Loans Work From a Bank/Financial Institution Perspective
Generally, whether interest rates are increased or lowered, banks will always have ways of using them to their advantage.
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May 10, 2020
Generally, whether interest rates are increased or lowered, banks will always have ways of using them to their advantage.
Central banks increase the interest rates during times of increased inflation, and lowers them when inflation is low.
The relationship between interest rates and inflation is inversely related, meaning that when one goes up the other goes down, and vice versa.
From the lender’s side, interest rate is the percentage compensation received from offering a loan service. From the borrower’s side, interest rate is the percentage cost paid to acquire a loan service.