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Steps to Take as Interest Rates Increase

The Federal Reserve announced an interest rate increase on March 16, 2022 – the first since 2018. But what does that mean for the general public? And what, if anything, do you you need to do now?

If you have loans or credit cards, the interest rate determines how much you will ultimately pay the lender. According to our partners at iGrad, “In exchange for allowing you to pay for a large purchase over time, retailers, lenders, and credit card companies charge interest.” You’ll pay a percentage of your purchase or loan amount in the form of interest over the life of your loan. So unless you have a fixed rate that doesn’t fluctuate, increasing interest rates mean you’ll be paying more in the long run. Here are a few items to examine before interest rates climb again:

Consider Refinance Opportunities

Student loans, auto loans, and mortgages are long-term financial commitments; the longer the repayment term of your loan, the more you will generally pay in interest over the years. If your current loan has a variable rate that goes up and down, this may be a good time to examine your options for refinancing. Even with the recent increase, interest rates are still fairly low. You could move to a fixed rate to lock in current low rates, or refinance at a lower rate than your current one.

Learn more about fixed and variable rate loans or apply for our student loan refinance option.*

Take the Plunge on Big Ticket Items

If you’re in the market for a new home or vehicle, you could save considerable money over the life of your loan if you purchase and finance those items now before interest rates increase again. Of course, only dive in if you’re financially prepared to make the payments. Even the lowest interest rates can’t offset a payment you can’t afford!

Consolidate Credit Card Debt

If you have credit card debt you are actively paying down, look into consolidating it at a lower interest rate, or utilize a zero percent balance transfer promotion. Just be sure to carefully review the terms to ensure your rate won’t skyrocket after a few months, and continue making more than your minimum monthly payment to take full advantage of the savings.

Overall, be sure to pay attention to current interest rates and trends. Those little interest rate numbers can make a big difference over time!

*By refinancing federal student loans, you may lose certain borrower benefits from your original loans. These may include interest rate discounts, principal rebates, or some cancellation benefits that can significantly reduce the cost of repaying your loans. In addition, measures related to the Coronavirus pandemic have paused payments and interest for federal student loan borrowers. If you are considering refinancing your federal student loans, please make sure to review these measures at www.studentaid.gov/coronavirus to understand your options.

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*APR = Annual Percentage Rate

In order to apply for a loan, you must first pick an individual credit union from which you wish to borrow. You can apply for the loan without being a member of the credit union you select, but you will need to become a member of that credit union in order to receive a funded loan. Therefore, it's important that you select a credit union that you will be eligible to join. Credit union membership requirements can include where you live, work, or attend school. Results are based on membership criteria provided by individual credit unions and do not imply a guarantee regarding accuracy or eligibility to join the listed credit union(s).

Calculations are based on the lowest possible rate and available repayment terms per lender. Rate estimates are based on credit information entered by the user and will not impact your credit. During the application process, a hard credit inquiry will be performed to provide exact rate information. Repayment calculations assume immediate full repayment. View the full range of rates and terms by visiting your credit union's website using links listed for each credit union above.

Using the free student loan refinance calculator does not constitute an offer to receive a loan and will not solicit a loan offer. Any payments and savings will depend on the actual amounts for which you are approved, should you choose to apply. This calculator is provided for educational purposes only and should not be relied upon as financial advice. Always consult your credit union or financial advisor when making your decision.

IMPORTANT NOTICE for refinance borrowers: By refinancing federal student loans, you may lose certain borrower benefits from your original loans. These may include interest rate discounts, principal rebates, or some cancellation benefits that can significantly reduce the cost of repaying your loans. Please review this important disclosure for more information.

Your actual rate within the range stated will be disclosed upon approval. Student borrowers may apply with a creditworthy cosigner which may result in a better chance of approval and/or interest rate.