Connect with us

Hi, what are you looking for?

Financial Literacy

Best Ways To Use Low Interest Rates 

Graphic showing dropping interest rates and mortgage rates

Best Ways to Use Low Interest Rates 

Now is a great time to borrow money. 

To continue to aid in the economic recovery from the coronavirus pandemic, the Federal Reserve has maintained its benchmark interest rate near zero. While it may go up in the future if inflation becomes a concern, interest rates on mortgages and student loans are hitting record lows. A 30-year, fixed-rate mortgage currently carries an average interest rate of about 3.24% APR, while those borrowing student loans are paying some of the lowest rates ever. Right now, rates on direct subsidized and unsubsidized loans for undergraduate students are 3.73% APR, compared to 4.53% APR in 2019. 

Let’s discuss what this all means for you, and how you can take advantage of these historically low interest rates.

What Do Low Interest Rates Mean For You?

There is good news and bad news, but the bad news isn’t terrible. Typically, lower interest rates mean less return on savings. So, if you have a savings account, the interest you’re earning is likely going to decrease. 

The good news is that borrowers are likely getting some relief. If you’re paying off credit card debt or student loans, your interest charges will be smaller. And if you’re in the market for something bigger — say, real estate — the interest rate on your new home will be significantly lower than in previous years. 

These low interest rates don’t necessarily mean you should go out and buy a new home if that wasn’t already something you were considering. But Prosper is here to help you understand the ways these low rates can benefit you and fit seamlessly into your life plan. 

How to Take Advantage of Low Interest Rates

No matter who you are, there’s a few key ways to use these lower interest rates to your advantage and save money: 

  • Refinance loans: If you have a mortgage or student loans, now is a great time to refinance. All that means is that you would pay off your old loan by taking out a new one with a lower interest rate. If your current rate is variable and you’re able to qualify for a fixed rate loan, that would save you even more money in the long run.  
  • Consolidate debt: If you’re juggling multiple loans, you can get them under control by taking out a consolidation loan. Consolidation loans can help debt become more manageable by combining all your debt into one lump sum — and only one monthly payment. A personal loan through Prosper is one example of this and a great option to get your loans under one roof! 
  • Transfer credit card debt: You can pay off your credit card debt faster by transferring the balance to a card with a lower interest rate. There are a few ways to do this, depending on what you’re looking for. One option is to transfer your balance to a credit card that allows balance transfers and has a lower interest rate. You can also go with a balance transfer credit card. One thing to consider is that balance transfer cards typically offer an introductory interest rate for a short period of time before the rate increases. You may only want to go with that option if you’re able to pay off the debt within the introductory time frame. 
  • Buy a home: If you’re in the market for a new home, now is a great time to dive into the real estate market. Take advantage of these historically low interest rates by taking out a home loan. If you’re already a homeowner, you may even want to consider investing in rental or vacation properties. 
  • Take advantage of a Home Equity Line of Credit (HELOC): HELOCs are revolving lines of credit. They utilize your home equity to give you access to cash at a great interest rate with enormous flexibility! Whether you’re planning on home improvements, a vacation, or paying down other debt, low interest rates mean there’s never been a better time to tap your home equity with a HELOC

With today’s low interest rates, now is a good time to make big financial moves. When it comes to borrowing money, Prosper is here to help. Check us out today and find out the smartest ways for you to take advantage of these low rates and save money. 

Read more

All personal loans made by WebBank, Member FDIC.’

HELOCs through Prosper are currently available only in Alabama, Arizona, California, Colorado, Florida, Illinois, Nebraska, New Hampshire, New Mexico, Oklahoma, Oregon, Pennsylvania, and Texas. Please carefully review your HELOC credit agreement for more information.

All HELOCs are underwritten and issued by Spring EQ, LLC, an Equal Housing Lender. NMLS #1464945.

Prosper Marketplace, Inc. – NMLS #111473, http://www.nmlsconsumeraccess.org

Arizona – Arizona Mortgage Banker License No. BK-0949818

California – Licensed by the Department of Financial Protection and Innovation under the California Residential Mortgage Lending Act (License #41DBO-121778)

In Colorado, regulated by the Division of Real Estate, License #111473

Illinois – Illinois Residential Mortgage Licensee No. MB.6761346

New Hampshire – Licensed by the New Hampshire Banking Department

Oregon – Mortgage Lending License ML-5732

Texas – SML Mortgage Company License #111473

Prosper Funding, LLC

221 Main Street, Suite 300 | San Francisco, CA 94105

6860 North Dallas Parkway, Suite 200 | Plano, TX 75024

© 2005-2021 Prosper Funding LLC. All rights reserved. 

Join our mailing list

Latest

Person checks their FICO Score

Credit Score Information

Most adults in the United States have at the very least, heard of a FICO® Score. However, most lack knowledge of the nitty-gritty of...

Woman looks up credit report compiled by the three credit bureaus Woman looks up credit report compiled by the three credit bureaus

Credit Score Information

You’ve probably heard a lot about the three credit bureaus, but many Americans aren’t sure exactly what they are. That’s OK because Prosper’s got...

MAn applies debt snowball strategy to his finances MAn applies debt snowball strategy to his finances

Credit Management

There are several common strategies to address personal debt, but one of the most well-known is the debt snowball strategy. Today, we will look...

Investor Center

Today we are sharing performance data from the Prosper Portfolio for March 2022. Highlights from the Prosper Performance Update – March 2022: Performance Update...

Ways to Save Money and the Environment Ways to Save Money and the Environment

Financial Lifestyle

There are many easy ways to save money and the environment in our everyday lives. From the laundry room to the mailbox, the grocery...

Credit Management

With another year behind us, we find ourselves in tax return season once again. While 2021 did bring back some semblances of stability and...

You May Also Like

Product Announcements

We know how important your credit score is to your financial well-being. That is why we have brought your FICO® Score to your Prosper...

Best Practices

What is consumer debt? It may sound scary, but part of financial empowerment is getting comfortable with the idea that well-managed debt is not...

Financial Literacy

Loan origination fees are a commonly misunderstood type of fee associated with mortgages and other types of loans. Many borrowers don’t understand what the...

Credit Management

Today, we are excited to announce the release of our new eBook, Your Ultimate Guide to Debt Consolidation, which is now available to download...