At the beginning of 2022, the bank rate stood at 0.25% but has now risen to 3.5%. The Bank of England set the bank rate, which banks and lenders then use to influence their interest rates.
The frequency of these rises throughout 2022 suggests that it will continue into 2023 also.
The reason behind increasing bank rate is to prevent costs from rising or falling too significantly. Increased interest rates should encourage people to spend less and save more, which should have a knock-on effect and reduce inflation.
Fixed interest rates can help to protect you from any unexpected changes in the market. If the Bank of England decides to increase the base rate, your fixed-rate means that your monthly payments will remain unchanged. This helps provide peace of mind and financial security when it comes to budgeting for day-to-day expenses or unexpected costs.
A fixed interest rate stays the same across the lifetime of your loan.
A variable rate will change depending on market conditions.
You could also get a hybrid rate, which is a combination of the two.
Fixed interest rates are often seen as the most reliable since your monthly payments are set for the duration of the agreement and won't be affected by any changes in the base rate. This can provide stability should interest rates rise or save you money if they fall.
Fixed interest rates offer considerable peace of mind and financial security. With the Bank of England increasing rates this frequently, you don't want to be worried about the next time your loan payments will go up.
Rising interest rates are put in place to encourage people to reduce borrowing. However, this is not always an option if your business costs are rising faster than your profits.
Rising interest rates can be a concern for businesses looking for finance. Love Finance only offer fixed-rate loans, so this is not something you have to consider if you obtain funding from us. You can see how much your repayments will be and approve the offer, knowing that these will not change across the lifetime of your loan.
Rising interest rates can have a significant impact on households, businesses and individuals. This is why fixed-rate loans are such an attractive option; they provide financial security and peace of mind by keeping monthly payments consistent throughout the duration of the agreement.
At Love Finance, we understand how important it is to ensure your loan is tailored to your needs. As such, we only offer fixed-rate loans, so you know exactly what you are signing up for from the outset. We also ensure our rates remain competitive at all times so that you can access the best loan options available.
If you're looking to get a business loan before further interest rate rises, enquire today to lock in your rate.
