If you are thinking about borrowing money, it is important that you understand interest rates. Here’s what you need to know:

‍

What is an interest rate?

Interest rate is the cost of borrowing money. When you borrow money, the lender charges you a percentage of the loan amount as payment for lending you money.

‍

Types of interest rates

Fixed interest rate : This stays the same throughout the year and makes budgeting easy.

Variable interest rate: This can change anytime based on market conditions that is to say your payment can go up or down. Learn more about how do personal loans work?. Learn more about apply for a personal loan.

‍

How does the interest rate work?

If you borrow a personal loan, Ugx. 45,000 with a 0.466% daily interest rate, at the end of 30 days, you will have accumulated an additional Ugx. 6,291,  making your total repayment Ugx. 56,791. (This amount is exclusive of any service fees).

Please note that Fido charges a service fee of Ugx. 5,500 on repayments but not disbursements. . Learn more about surviving inflation in uganda: smart borrowing. Learn more about build your fido score to boost your financial reputation.

‍

What affects interest rates?

• Loan type: Both Fido personal loans and business loans have the same interest rate. The difference is in the number of days you take to repay the loan.
• Loan duration: At Fido, we give you the freedom to choose your loan repayment period starting from the 10 days. You can even choose to pay in installments. 
• Lender’s policies: Different lenders have different rates. Always compare options. 
• Economy: Inflation, government policies, prevailing market conditions also influence interest rates.

‍

Tips for managing your loan interest

• Borrow what you need.
• Repay on time
• Understand the Annual Percentage Rate. This includes the interest rate and other fees
• Understand the Terms & Conditions before signing. 

‍

By understanding interest rates, you can make informed, smarter financial decisions.