How do I know if my loan's interest rate is too high?
TL;DR: Compare your rate to the typical range for that specific type of debt, not to a single "good rate" number — a 9% car loan and a 9% credit card mean very different things. Roughly: mortgages and secured loans are usually the cheapest (often mid-single-digits to low double-digits depending on your market and credit), personal and car loans sit in the middle, and credit cards are almost always the most expensive by a wide margin (commonly 25%+ APR).
Typical ranges by debt type (directional, not a quote)
| Debt type | Typically higher-cost signal |
|---|---|
| Mortgage / home loan | Meaningfully above your country's current base mortgage rate |
| Car loan | Double-digit APR, especially on a used car or with weaker credit |
| Personal loan | Anywhere from high single digits to 20%+ depending on credit profile |
| Credit card | 25%+ is common and not unusual — but it's still the most expensive debt most people carry |
The real test: what would refinancing actually save?
A rate only matters in dollars and cents. The question isn't "is 12% high" in the abstract — it's "would moving to a lower rate save more than the fees and hassle of switching cost?" For a large, long-tenure loan like a mortgage, even a 1-2 percentage point difference can be worth tens of thousands over the life of the loan. For a small personal loan with 8 months left, refinancing fees might eat the entire benefit.
What to actually check
- The APR, not just the headline interest rate — APR includes fees and reflects the real annual cost.
- Whether it's fixed or variable — a variable rate that looks fine today can rise.
- Any prepayment penalty — a "good" rate is less good if paying it off early costs extra.
See the real number for your situation
Our Home Loan Prepayment calculator shows exactly how much a given rate costs you in total interest over the loan's life, and our Get Rid of My Loan report ranks every debt you're carrying by what it's actually costing you — the clearest way to see which of your rates genuinely deserves attention first.