Higher interest rates can have an impact on your finances — increasing the cost of borrowing and raising monthly payments.
Here’s what you can do to minimize the impact:
Adjust your timing
Consider moving up the purchase of a house, car, large appliance, or another big purchase — and lock in a fixed rate before interest rates get any higher.
Stay on top of the situation
Watch the news and pay attention to future rate hikes, so you can monitor how higher rates are impacting your finances.
Work on increasing your credit score
Improving your credit score can actually help combat rising interest rates. If you are looking for a new credit account, or refinancing a current loan, you may qualify for lower rates with a better score, helping to counteract the interest increase.
Get a credit check-up
Will you still be able to make on-time monthly payments as interest rates rise? Give yourself a credit check-up and see how much more you may be paying each month as rates rise. If it looks like more than you’ll be able to handle, explore your options now — before you start missing payments and damage your credit.
Do what you can now to prevent future problems
If you’re considering new credit
When interest rates are rising, fixed-rate, fixed-term personal loans offer the security of an annual percentage rate (APR) and monthly payment that are fixed for the life of the loan. Shop around for the best rates and compare different types of personal loans to see what’s best for you. Fixed-rate, fixed-term credit options to consider include:
Consider opening a fixed-rate personal loan — either secured or unsecured. A personal loan is ideal for consolidating high-interest rate debt or for making large purchases.
See what financing promotions may be available from your car dealer, and check out the vehicle loans your bank offers.
If you’re buying or refinancing a home, you can protect yourself from rising rates with a fixed-rate mortgage instead of an adjustable rate mortgage (ARM).