Interest rate on loans – what you should know

What does the loan interest rate consist of? Does the value depend on other factors?

An important parameter

The interest rate is a very important parameter of the loan – it is an indicator of the cost we will incur in connection with incurring debts with the bank. This is the amount added to the loan installments while maintaining the proportion. The amount of monthly installments depends on the interest rate, it also affects the total cost of the loan. The higher the interest rate, the higher the cost – this is the general rule.


The interest rate can be negotiated with the bank. Sometimes they go to a settlement and lower the loan margin
The height of this parameter is affected by the following:

– loan margin – this is the percentage profit that the bank that gives us the loan will earn. Indicates how much money you earn from selling this service.
– reference rate – is the base rate set by the market. This is the basis for the interest rate on all types of credit and loans.

The WIBOR rates are the base rate on the Polish market. As for the underlying loans, i.e. loans given in a different currency, the rates are LIBOR and EURIBOR. Rates are changed cyclically and do not depend on the banking institution. It is influenced by various mechanisms, mainly regarding the activities of Monetary Policy in our country. The margin, however, depends on the bank and has no fixed value. It is specified in the loan agreement and does not change during the loan repayment period (if we repay installments on time).

In addition to interest, it is also worth paying attention to other costs that the bank charges to each borrower. Not everyone is aware of them, and sometimes they cause considerable trouble. Loan-related costs may have different values ​​and depend on the banking institution concerned.