Thanks to rising trade tensions and speculation around new tariffs, experts are starting to predict a possible shift: lower interest rates could potentially be on the horizon. While nothing is guaranteed, being ready to act if and when the numbers change can help you stay ahead of the curve — and your money goals.
Whether it’s finding loans with low interest rates, consolidating debt, or refinancing your mortgage, this guide breaks down how to take advantage of low interest rates so you can borrow smarter, invest more wisely, and put your money to work in uncertain times.
Want options? We’ve got them: MoneyLion helps you compare offers for loans with low interest rates — so you can find the one that fits your life (and budget).
Table of contents
1. Take advantage of low-rate loans
When rates dip, it can make financing major expenses significantly more affordable. We’re talking home projects, buying a car, or even tuition (NOT an impromptu weekend in Vegas). Lower borrowing costs mean you pay less over time — if you lock in the right loan at the right moment.
What to consider:
- Home improvement loans: A renovation loan with a lower rate lets you upgrade your home without overspending on interest.
- Auto loans: If you’ve been eyeing a new ride, now’s the time. Low car interest rates can translate to thousands saved over the auto loan term.
- Student loans: Whether you’re applying or refinancing, student loans with low interest rates can lighten your financial load for years to come.
Recommended: How Do Interest Rates Affect The Stock Market?
2. Consolidate high-interest debt
Now’s a great time to trade in your high-interest debt for something leaner. Interest rate cuts can open the door to credit cards with low interest rates or personal loans that help you simplify and save.
How it works:
- Apply for a lower-interest loan or balance transfer credit card
- Use that to pay off existing debt (credit cards, personal loans, etc.)
- Streamline to one payment (ideally with a better rate)
This move can be especially powerful if you’ve been carrying multiple balances with punishing rates.
Recommended: How to Consolidate Credit Card Debt
3. Refinance your mortgage
One of the most significant ways to benefit from lower interest rates is by refinancing your mortgage. Refinancing your mortgage is one of the biggest opportunities during a rate drop. With low mortgage refinance rates, homeowners can reduce monthly payments, pay off their homes faster, or save big on interest over time.
Why it’s smart:
- Lower monthly mortgage payments
- Less interest paid over the life of the loan
- Option to switch from a 30-year to 15-year term
If you locked in a mortgage back when rates were higher — or if your credit has improved since — you could see meaningful savings.
4. Refinance auto loans
Just like with mortgage refinancing, you can also refinance your auto loan when interest rates drop. This is especially valuable if your current loan was secured at a higher rate due to market conditions or your personal credit score at the time of purchase.
Why you should consider it:
- Your credit has improved since you took out the loan
- Rates have dropped since your original agreement
- You won’t face excessive prepayment penalties
Before you refinance, ensure that any savings from a lower interest rate won’t be wiped out by lender fees or penalties for paying off your existing loan early.
5. Adjust your investing strategy
Low rates can shift the way you invest. With returns on traditional savings accounts falling, some people take the opportunity to rethink where they’re putting their money.
Moves to consider:
- Diversify your portfolio with equities or ETFs: These assets have historically outperformed bonds and savings accounts over time. That doesn’t mean there isn’t risk of losing, and it doesn’t guarantee future outcomes. But a mix of industries and risk levels can help balance your exposure.
- Shift some funds into bond ETFs or dividend stocks: These options provide passive income during periods of lower rates. They’re often used to help offset market swings.
- Consider dollar-cost averaging if you’re hesitant to invest a lump sum: This “set it and forget it” strategy takes emotion out of investing. By investing consistently, you avoid the pressure of trying to time the market.
MoneyLion offers a fully managed portfolio with no minimums and no management fees, making it easy to start investing regardless of what the market’s doing next.
6. Boost your savings
When interest rates drop, savings accounts don’t always keep pace. But that doesn’t mean you’re out of options. The trick? Move your money into accounts that still offer solid returns and keep your cash accessible.
Steps to take:
- Compare high-yield savings accounts and money market accounts: These often offer better returns than traditional savings accounts. Just make sure to check for any fees or minimum balance requirements.
- Consider locking in short-term CDs before rates fall further: Certificates of deposit can give you a guaranteed return. A short term (6–12 months) keeps your cash accessible if rates shift again.
- Automate your savings to stay consistent: Set up automatic transfers from your checking account to your savings. It’s a simple way to build a habit — and grow your balance without thinking about it.
MoneyLion offers a convenient marketplace to compare top-rated savings accounts that can help your money grow—even as rates shift.
Get Ahead of the Next Market Move (Whatever It May Be)
Interest rates aren’t just numbers —they’re a lever for how you borrow, invest, and save. Whether or not the Fed cuts rates in the near future, knowing how to take advantage of low interest rates puts you in a stronger position when things do change.
Take control now by reviewing your loans, optimizing your savings, and looking into low mortgage rates, low mortgage refinance rates, and even student loans with low interest rates. Because when the market moves, you’ll be ready.
