Editor's choice: Upstart personal loans
- Work and education get you better rates
- Fair credit OK
- No prepayment penalty
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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.
Your rate remains the same throughout the specified term.
Your rate may fluctuate throughout the loan term.
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.
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.
Related reading: How to decide between a secured and an unsecured personal loan
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:
Choose from several options, but beware of this lender’s fees and poor reviews.
Business loan interest rates dropped in 2020 and are likely to stay low. Here’s why.
A kids savings account with an interest rate that compounds daily but has long hold times for customer service.
Get a low rate guarantee, but you won’t know if you’re eligible until you apply.
Get a line of credit with low closing costs — but you can’t apply online.
Get fixed- and variable-rate options in a HELOC, if you qualify for membership.
Offers reduced-rate, no-closing-cost HELOCs, but only in specific states.
Get low rates with minimal fees — if you qualify for its limited membership.
Offers no annual fee, discounted HELOCs — but locations are limited.
RefiJet helps you save on your monthly car payment or interest with a few simple steps.
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