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The
margin is one of the factors used to calculate
the rate of interest on a loan with an adjustable
rate. Lenders add the margin on to whatever
indexed rate is being used as the basis for
the loan. Margin is expressed as a percentage and
each lender can choose any amount as its margin.
When obtaining a loan, it’s important to know what
the lender is using as its margin because an
increase of just one percentage point can
considerably increase the total cost of the loan
and the amount that is paid at each payment
interval. If the margin is high, try another
lender. |
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