High-interest

Describing a financial arrangement, typically a loan or savings account, that involves a relatively large percentage of interest charged to the borrower or paid to the saver. high-interest rates are often implemented to offset higher risk, the increased cost of funds, or a combination of factors. They can be attractive to lenders seeking higher returns, but carry considerable risk for borrowers as payments become more costly and repayment becomes a potential struggle. Conversely, high-interest savings accounts offer savers higher returns on their deposits.

High-interest meaning with examples

• Maria needed a car and was approved for a high-interest loan. Unfortunately, due to the high APR, the monthly payments were straining her budget. She's considering refinancing to a lower rate. The situation highlights the importance of careful financial planning and considering all options before committing to such expensive credit.
• When exploring credit card options, Mark was wary of high-interest offers. He prioritized cards with lower APRs, even if they had fewer rewards. Understanding the long-term cost of borrowing was paramount in his decision-making, showing financial responsibility.
• The struggling business owner realized that a high-interest short-term loan was a gamble. While it might provide immediate cash flow, it risked crippling the company's finances long term. This illustrates the perils of quick fixes.
• Aware of the risks, Jane avoided high-interest payday loans at all costs. The exorbitant fees and short repayment periods made them traps for the financially vulnerable. She used alternatives such as credit unions instead.
• Sarah was pleasantly surprised to find a high-interest savings account, however she verified its legitimacy as a lot of 'too good to be true' offers are out there. This would help her earn more on her savings. She carefully reviewed the terms and conditions before opening the account.