If you are worried that interest rates will rise then there are things that you can do to protect yourself from any impact that it may have.
Take out no loans
If you are worried that interest rates will rise, particularly if you think that they will escalate then you may want to consider waiting before taking out any loans. The problem is that you will not want to delay forever though, as you may want the money for something specific. If you are borrowing for a long time – such as a mortgage, then if you wait a while the interest may go up even further. It may be best to take the loan while the rates are lower and take advantage while you can rather than delaying, when it is possible that you could be paying higher rates for the long term. If you are taking out smaller loans, then consider whether you can just go without the loan entirely. You might be able to save the money up instead and that could mean that you will not have to pay any interest at all. In fact, rising interest rates could mean that you get a better return on your savings.
Use a fixed rate
If you are taking a loan and fear that it may be too expensive to pay the repayments if the interest rates go up then it could be wise to choose one with a fixed rate of interest. A fixed rate may be dearer than a variable rate but if the base rate goes up, it will stay the same. This should help you to be able to manage more easily. There are different loan types such as those for bad credit customers, that have fixed rates and so it could be worth comparing them to see which might be the best for your needs. It is worth being careful with a fixed rate though as if the base rate does not go up or goes up just a little bit, then it will actually have been cheaper to have stayed with the variable rate.
Put money in savings accounts
Saving money is the best thing to do when interest rates rise. If you save regularly then you can use that money to pay for things when you need them rather than having to borrow. As interest rates go up, you will get more interest on your savings. It also means that if you have loans and find that an increase in interest rate makes it hard to manage the repayments, you will have money in the savings account that you can use to help you out. You will need to get quite a lot of money in that account as interest rates could stay high for a while or rise even more. This means that it is worth thinking about how you will do this. It can be wise, for example, to put some aside each month. Setting up a direct debit is the best way to ensure that you will not forget. Set an amount which you can afford but is still significant so that you can start building up a good sum of money.
Increase your income
If it is possible, then it could be a good idea to increase your income in line with rate rises and then you will be able to afford them. If you are self-employed then you might be able to do this by charging more or if you are employed you may have to ask for a pay rise. You may also need to take on extra work, do more hours or things like this to increase your income. You will know whether this is something that you will be able to do depending on your current circumstances. It can be worth checking immediately whether this is possible, especially if you will have to take on extra work. Consider whether you are allowed to do this according to your current employment contract, whether you will have the time and whether there is work out there that you can do. It is good to think about all of these things so that you are away of the situation and any risks that you are taking.
If increasing your income is not an option, then it may be possible for you to spend less money. There maybe areas where you are already aware that you spend too much and that you know you could cut down in if you have to. If not then take a careful and close look at your finances and try to identify them It might be that you could shop at a cheaper supermarket, move to a cheaper phone contract or buy less things generally. You may not want to do this immediately, but if you can think of areas where you can do it, then this will hep you if you do need to.