Rates are easy to dismiss because the difference between two offers usually sounds small. A couple of percentage points is hard to feel in a monthly payment, so people compare the payment and sign. Over a decade, though, those points are not a rounding error — they are frequently the largest single factor in what the thing cost.
Compounding is why. Interest applies to a balance that includes previous interest, so a small annual difference does not add up, it multiplies. On a long loan, that is the difference between paying for the asset and paying for the asset plus a meaningful fraction of a second one. On savings, the same arithmetic runs in your favour and is just as slow to notice.
The practical habit is to compare total cost over the full term rather than the monthly figure. A lower payment achieved by stretching the term almost always costs more in the end, and the comparison only becomes visible when you multiply the payment by the number of payments and subtract what you borrowed.
None of this requires forecasting. It requires reading two numbers — the rate and the term — before the payment, and being willing to shop for a loan with the same effort you would spend shopping for the thing it buys. The rate is the price of the money, and it is negotiable far more often than people assume.
