Chapter
The Relationship Between Loan Length and Interest Rates
05:55 - 11:41 (05:46)
The length of a loan can impact the interest rate charged due to the risk of default and the effect of inflation on the value of the borrowed money over time. Financial experts recommend refinancing to a shorter loan length, such as 15 years, for less risk and a lower annual percentage rate (APR).
Clips
The borrowed economy of the world is based on loans and interests, and it has been created over several years with the focus on micro-level lending such as house buying, car buying, credit cards, etc.
05:55 - 09:10 (03:14)
Summary
The borrowed economy of the world is based on loans and interests, and it has been created over several years with the focus on micro-level lending such as house buying, car buying, credit cards, etc. The interest rate depends on the risk of the loan.
ChapterThe Relationship Between Loan Length and Interest Rates
EpisodeThe Scintillating World of Interest Rates
PodcastStuff You Should Know
There are two types of interest rates you pay on a mortgage: nominal rate and real interest rate, the latter of which factors in inflation.
09:10 - 11:41 (02:31)
Summary
There are two types of interest rates you pay on a mortgage: nominal rate and real interest rate, the latter of which factors in inflation. Refinancing to a 15-year loan can lower the annual percentage rate and be less risky than a 30-year mortgage.