How does a loan work and what is the interest rate?

It’s no lie to say that one of the first things to know about financial education This is how something called the interest rate works. And it doesn’t just impact your personal finances, It also influences the stability of governments and banks.

From 2023, the Banco de México maintained its monetary policy. The national agency managed to set the interest rate at 11.25% for the fourth consecutive time, in a bid to combat inflation. so you first need to know how the system works.

What is an interest rate?

It’s simple, the interest rate is the price or amount that must be paid to obtain and use an amount, whether for a loan, credit or bond. It is mainly expressed as a percentage since it is the percentage that is paid in addition to the amount of money requested in an operation.

It should be noted that the more money requested, the more it will be paid. Asking for 5% of 10,000 pesos is not the same as asking for 5% of 50,000 pesos. In both cases, the payment will be different. “I use my bank card, it’s free money”, This is the biggest mistake there is: ultimately, the money will be collected on the date of your payment.

Types of tariffs in Mexico

Fixed interest rate

In this you must take into account that the established value does not vary during the term of the loan. The percentage agreed at the start is maintained.

Variable interest rate

Unlike the first, this depends on the evolution of the so-called reference rate. If Banxico increases or decreases it, this will be reflected in your credit payment.

What should I consider with a credit card?

• Compare the total annual cost
• Choose the card with the best benefits
• Look for a card without annuity
• Understand the terms and conditions of your card
• Make the most of your card benefits
• Take the money as a loan, not as an extension of your salary
• Don’t use more than 30% of your card limit

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