Respuesta :
If the interest rate increases, the bank is aware that the client will not be able to repay the loan.
What do you understand by interest rate?
The amount a lender charges a borrower is called an interest rate, and it is expressed as a percentage of the principal or the loaned amount. Typically, a loan's interest rate is expressed as an annual percentage rate, or APR (APR).
What do rising interest rates mean?
Your ability to get credit is directly impacted by rising interest rates. Higher interest rates, however, can imply a larger return on your money.
What should you do during a period of rising interest rates?
Whenever interest rates fluctuate, you have the chance to examine your portfolio. To lock in a rate before it significantly rises, it may also be advantageous to refinance some loans. Your current situation and your financial objectives will influence the specific actions you take. A financial manager can assist you in taking the actions that will most likely result in long-term success.
Learn more about interest rate: https://brainly.com/question/13237368
#SPJ4
