Understanding Equity Bank Loan Interest Rates in 2023

Equity Bank has been a trusted financial institution for individuals and businesses in the Midwest for over 90 years. As one of the largest independent banks in the region with over $20 billion in assets Equity Bank offers a wide range of lending solutions including personal loans auto loans, mortgages, business loans and more.

As we move into 2023, there has been a lot of discussion around how interest rates on loans may change in the coming year. With inflation remaining elevated and the Federal Reserve continuing to raise interest rates to combat it borrowers are understandably curious how their loans with Equity Bank could be impacted.

In this article, we’ll break down what factors determine Equity Bank’s loan interest rates, what their current rates are, and what borrowers may see in 2023 based on economic projections.

What Determines Equity Bank’s Loan Interest Rates?

Equity Bank, like all lenders, sets interest rates on loans based on a few key factors:

• The Federal Funds Rate – This is the interest rate banks charge each other for overnight lending and is directly controlled by the Federal Reserve. The Fed raises this rate to slow economic growth and inflation. When it goes up, interest rates on loans typically follow.

• Equity Bank’s Cost of Funds – This refers to the interest rate Equity Bank pays to borrow money from depositors and other institutions. When their cost of funds rises, it gets passed along to borrowers through higher loan rates.

• Credit Risk – The riskier a borrower is deemed, the higher interest rate they will be charged. Credit score, income, assets, and other factors determine risk and rate.

• Loan Type – Interest rates can vary significantly based on the type of loan. For example, auto loan rates are lower than credit card rates due to collateral securing the debt.

• Promotions – Equity Bank may offer discounted promotional rates at times to attract new borrowers. These are often temporary.

Taking these factors into account, Equity Bank’s Chief Financial Officer and team determine appropriate interest rate tiers for loans on an ongoing basis. Rates may be adjusted based on market conditions.

Current Equity Bank Loan Interest Rates

Here is an overview of the current interest rate ranges across Equity Bank’s most common loan products:

• Personal Loans – 7.99% to 18.99% APR

• Auto Loans – 3.49% to 18.99% APR

• Mortgages – Rates start as low as 5.43% APR on 15-year fixed mortgages

• Home Equity Lines of Credit – Variable rates currently as low as 5.25% APR

• Credit Cards – 11.99% to 23.99% APR

The lowest rates are generally reserved for borrowers with excellent credit and income. It’s important to note mortgage rates have risen significantly over the past year in tandem with the Fed’s rate hikes.

Rates on savings accounts and CDs have also increased to remain competitive. Equity Bank offers up to a 3.05% APY on select CD terms currently.

Projecting Equity Bank Loan Rates in 2023

Looking ahead to 2023, analysts widely expect the Federal Reserve to continue raising their benchmark interest rate to combat inflation. Most economists predict the Fed Funds Rate will rise to around 5% by mid-2023.

For Equity Bank borrowers, this will likely translate to the following changes in loan interest rates this year:

• Personal Loans – May rise by 1% to 2% for both new and existing borrowers

• Auto Loans – Average rates increasing from 5% currently to 6% on new loans

• Mortgages – Rates on 30-year fixed mortgages could reach 7% by end of 2023

• Credit Cards – Existing variable APRs expected to rise by 2% to 3% by year end

The extent of rate increases will be determined by how aggressive the Fed remains in their fight on inflation. However, borrowers should prepare for rising loan costs in 2023. The good news is wage growth remains strong, which will help offset increased monthly loan payments.

For existing Equity Bank borrowers, be on the lookout for notices indicating your loan’s variable rate is increasing. For new borrowers, shop around as some banks may be slower to hike rates. Getting pre-approved can lock in a lower rate.

Tips for Managing Rate Increases

While higher interest rates will challenge many borrowers in 2023, there are steps you can take to soften the impact:

• Boost your credit – A score over 740 can qualify you for the lowest rates. Pay bills on time and reduce credit card balances.

• Shorten your loan term – Pay loans off faster to reduce interest costs over the life of the loan.

• Make extra payments – Making an extra mortgage principal payment annually can shave years off a loan term.

• Refinance existing loans – You may be able to replace a current mortgage, auto loan, or personal loan with one at a lower rate.

• Use home equity – Tap into home equity to consolidate higher-rate debts, but be cautious of risk.

• Seek loan modifications – Contact Equity Bank to discuss adjusting payment plans if needed. Avoid missing payments.

The financial experts at Equity Bank are always available to review your current loans and find ways to optimize them, even when rates are rising. Our local team has helped Midwest families improve their finances for generations.

Equity Bank Can Help Navigate Rate Increases

As a relationship lender, Equity Bank takes pride in working closely with our borrowers. We understand rising interest rates can be challenging to manage. Our experienced bankers will help explain changes to your loans and discuss options that keep payments affordable.

We also consistently offer competitive rates on new loans that match or beat offers from nationwide banks. Our efficient loan process provides pre-approvals in as little as one business day so you can move swiftly on purchasing needs.

To learn more or apply for an Equity Bank loan, stop by your neighborhood branch or visit our website. Together, we’ll find the right financial solutions to help you achieve your goals in 2023.