Which interest rate is lower? 0% or 8%? The answer is obvious. No interest is better than paying interest. The software is designed to keep your LOC balance close to 0 (for the most part) so that the effective interest rate stays low. The effective interest rate is the overall interest you are paying on your Line of Credit, your mortgage, and all other debts. This is achieved by using the interest cancellation method in the line of credit. The nominal interest rate of 11% on a LOC might end up costing you only 2.1% because of the interest cancellation method the software uses to optimize savings.