What Kinds of Loans Typically Have High Interest Rates?

What Kinds of Loans Typically Have High Interest Rates?

Loans that typically have high interest rates include payday loans and auto loans, states Debt. The interest rate of a loan often varies according to the personal financial situation of the borrower.

Short-term loans generally have a higher interest rate than long-term ones. Moreover, unsecured loans tend to be more expensive because the loaner takes a higher risk when lending money without a collateral, reports Totally Money. Credit cards and overdrafts often have high interest rates for borrowers with a poor credit score. Loans that are intended specifically for people with bad credit scores also tend to have a high interest rate.