What are interest rates, and how do they work?

Pros

– Exact costs of borrowing / rewards of saving can be calculated

– Protection from any sudden downturns in the wider economy

– Economic improvements can have a positive effect on your debt or savings value

– Early debt repayment without incurring fees may be possible

Cons

– No benefit from any improvements in the wider economy

– Less favourable rates typically follow any promotional period

– Unfavourable economic shifts can leave you owing more or saving less

– Difficult to predict exactly how much you’ll repay or save