Teaser Loan Meaning

Teaser loan are offered by various banks to its customers, the idea behind this type of loan is to attract customers towards the bank. Under this facility a customer initially pays lower rate of interest on debt which gradually increases over the years.

In teaser loan there is an introductory period during which the rate of interest will be low but after that introductory period interest rates increases and therefore an individual who is thinking of taking this type of debt should be prepared for increased monthly repayment after some years and should plan his or her budget accordingly. It is ideal for those people who have got the job recently because at early stage of a career your salary is low and after 1 or 2 years as you get promotions or move to better paying job your salary will also increase and hence you can pay higher interest on loan to the bank.

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