With interest rates on a down trend, the winners are borrowers who can get cheaper loans.
This week I got a mail from the orange bank that their rates have dropped from about 21% to 16%. So how can you make this interest rate environment work for you?
Perhaps, you should consider refinancing existing loans.
Refinancing basically means to replace an existing loan with a new loan that pays off the old loan.
If you have an outstanding loan of N1m from Red Bank at 21%, work to Orange Bank to get a loan of N1m at the new 16% interest rate. With the new loan, you can pay off the old loan at the Red Bank.
This helps you to reduce your monthly repayment bill.
You however need to watch out for closing out costs, prepayment penalties and changes in the terms of the loan that may be disadvantageous to you.