Debt and interest charges seem to go hand in hand. For the most part, a lender doesn’t want to simply give you money without getting something in return. While you might not be able to avoid having interest charges on some loans, there are ways to make sure you pay as little as possible. These tips for interest rates will help you save money in the long run.

Pay Within the Grace Period

Some credit cards have a grace period, during which time you aren’t charged interest on the amount you’ve borrowed, as long as you pay the amount in full by the due date. That means that if you use your credit card to purchase something that costs $150 and pay the $150 by the due date, you won’t pay more than the original amount. But, if you are only able to pay $25 of that $150 by the due date, you’ll be charged interest on the remaining $125. Plus, if you charge anything else to the card while carrying a balance, you’ll need to pay interest on those amounts, too, without the benefit of a grace period. Committing to only charging what you can afford to pay back before its due is one of the best ways to avoid paying more.

Weigh the Pros and Cons of a Balance Transfer

Paying off what you owe within the grace period only helps you avoid paying interest if you aren’t carrying a balance on your credit card and if you have a card that offers a grace period. Other common tips for interest rates usually recommend considering a balance transfer if you have a significant amount of credit card debt or are paying a high interest rate on that debt. Transferring a balance from a high interest card one with a lower rate or a zero percent interest rate can help you save a considerable sum of money while you pay off your debt.

Before completing a balance transfer, you want to read the fine print and make sure you understand the pros and potential cons of doing so. Although the new card might not charge interest, the card company can charge you a fee for doing the transfer, as long as they let you know about the fee in advance, according to the Consumer Financial Protection Bureau. There’s also a chance that an interest rate will kick in before you’ve paid off the amount due, or if you use the card to make new purchases. If your goal is to completely avoid interest, make sure you’ll be able to pay off the amount before the rate changes.

Go with a Fixed Rate

Some interest rates will change with market while others are fixed and either cannot change over the life of the loan or can only be altered after the lender gives you notice. Whether you are reviewing rates for a home loan, credit card, or other type of loan, in many cases, it’s better to go with a fixed rate over a variable or adjustable one. In the case of a mortgage, an adjustable rate may initially be lower than a fixed rate. But, it’s more likely that the rate will adjust up after a period of years, meaning you’ll pay more each month and over the life the loan.

Interest rates might seem unavoidable, at least for some types of loan. But, if you aim to pay of your debts in full each month and choose the type of rate you have carefully, you can avoid adding to the cost of your loan.

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