Fixed rate vs variable rate loans: What's the difference | finder.com

Compare fixed rate vs. variable rate personal loans

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Find out whether you should lock your rate.

As well as choosing a lender, deciding on your loan term and choosing between secured and unsecured, you also have to decide whether you want your rate to be fixed or variable. These two rate options offer different benefits and drawbacks. The guide below will take you through the differences between fixed and variable interest rates and help you decide which option is right for you.

Our top pick: LendingClub Personal Loan

  • Min. Credit Score Required: 640
  • Min. Loan Amount: $1,000
  • Max. Loan Amount: $40,000
  • APR: 6.95% to 35.89%
  • Requirements: US citizen or permanent resident, verifiable bank account, steady source of income, ages 18+.
  • No prepayment penalties
  • Flexible loan terms
  • Fast and easy application

Our top pick: LendingClub Personal Loan

A peer-to-peer lender offering fair rates based on your credit score.

  • Min. Credit Score Required: 640
  • Min. Loan Amount: $1,000
  • Max. Loan Amount: $40,000
  • APR: 6.95% to 35.89%
  • Requirements: US citizen or permanent resident, verifiable bank account, steady source of income, ages 18+.
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The key differences between fixed and variable interest rates on personal loans

Fixed rates Variable rates
Description Your rate remains the same throughout the specified term. Your rate may fluctuate throughout the loan term.
Main benefit
  • Your repayments remain the same no matter what’s happening in the market.
  • Your starting rate is usually lower than that of fixed rate loans and could possibly remain lower.

What are fixed and variable interest rates on personal loans?

Personal loans come with two types of interest rates: fixed or variable. Fixed interest rates remain the same throughout the specified term, which may be for the entire loan term or for an introductory period. If you opt for a variable rate personal loan, you’ll receive the advertised rate, but this rate may change throughout the loan term depending on interest rate movements in the market.

Compare a range of fixed and variable rate personal loans

Updated May 21st, 2019
Name Product Filter Values Minimum Credit Score Max. Loan Amount APR
640
$40,000
6.95% to 35.89%
A peer-to-peer lender offering fair rates based on your credit score.
680
$100,000
5.99% to 16.24%
No fees. Multiple member perks such as community events and career coaching.
550
$100,000
3.99% to 35.99%
Quickly compare multiple online lenders with competitive rates depending on your credit.
Good to excellent credit
$100,000
5.34% to 35.99%
Get personalized rates in minutes and then choose a loan offer from several top online lenders.
620
$50,000
7.99% to 35.89%
Affordable loans with two simple repayment terms and no prepayment penalties.
550
$100,000
3.84% to 35.99%
Get connected to competitive loan offers instantly from top online consumer lenders.
550
$10,000
34% to 155% (Varies by state)
Check eligibility in minutes and get a personalized quote without affecting your credit score.
640 FICO®
$35,000
5.99% to 29.99%
A prime lender with multiple repayment methods.

Compare up to 4 providers

What are the benefits of each interest rate type?

Fixed rate personal loans

  • Your repayments remain unchanged throughout the specified term, so you know what to expect.
  • You may be able to secure a low rate.

Variable rate personal loans

  • The starting rate is usually lower than that of the comparable fixed rate loan.
  • It’s possible for the lower interest rate to remain low throughout the term of your loan.

interest rate choice

What are the drawbacks of each interest rate type?

Fixed rate personal loans

  • The starting rate is usually higher than that of comparable variable rate loans.

Variable rate personal loans

  • Your interest rate could increase and make your loan more expensive over time.
  • You may find less competitive rates.

How do I work out which rate type is best for me?

The right type of interest rate for you will depend on a few different factors. Here are a couple of questions you can ask yourself to help you decide:

  • What interest rate can I get? When you find the most competitive rate, be sure to check the eligibility criteria of that loan to see if you qualify.
  • How affordable are the monthly payments? If your repayments are only just working with your budget, a fixed rate loan will ensure they won’t increase.

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Credible Personal Loans

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Even Financial Personal Loans

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LendingClub Personal Loan

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SoFi Personal Loan Fixed Rate (with Autopay)

No fees. Multiple member perks such as community events and career coaching.

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US Personal Loans Offers

Important Information*
Logo for Credible Personal Loans
Credible Personal Loans

Get personalized rates in minutes and then choose a loan offer from several top online lenders.

Logo for Even Financial Personal Loans
Even Financial Personal Loans

Get connected to competitive loan offers instantly from top online consumer lenders.

Logo for LendingClub Personal Loan
LendingClub Personal Loan

A peer-to-peer lender offering fair rates based on your credit score.

Logo for SoFi Personal Loan Fixed Rate (with Autopay)
SoFi Personal Loan Fixed Rate (with Autopay)

No fees. Multiple member perks such as community events and career coaching.

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