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Being a concept that mirrors many aspects of economic activity, the interest rates have a special meaning, both in theory and in practice – a great ability to reveal the status and trends of economies. The personal loan interest rates play an important role in the mechanisms of economic functioning, fulfilling several functions in this regard. One of these functions is that the interest rate helps to keep the inflation rate at healthy levels. For example, when the inflation gets too high, the government can intervene to stop this process by raising the interest rates. |
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