A fixed rate loan can give you a way to finance what you want while keeping repayments the same for the duration of the loan term. There are a few different loan terms available. This guide takes you through two-year fixed rate personal loans, what types you can consider applying for and how to compare your options.
When you apply for a fixed rate loan, the rate on your contract stays in place for the duration of the two-year term. At the end of the two years, a variable rate may come into effect (if this is how your contract is set up) or more likely, you will have finished paying for your loan.
Repayment schedules differ between lenders, but the options available are usually weekly, fortnightly or monthly. Fixed rate loans can be secured or unsecured and you can use them to pay for a car, a holiday, home renovations or even to consolidate debt.
What types of fixed rate personal loans are available?
There are a few types of fixed rate personal loans you can apply for, including:
Car loan Finance your new or used vehicle purchase and pay it off over a two-year period. As the loan is secured, you tend to find more competitive rates on offer.
Secured personal loan More than a car can be used as security for a loan – motorcycles, jet skis, boats and even term deposits can be used as guarantees on a fixed rate loan. Find out more in our secured loans guide.
Unsecured personal loan If you need a flexible loan amount, want to finance a few purchases or are looking to consolidate debt, an unsecured fixed rate loan may be an option to consider.
How to compare your two-year fixed rate loan options
If you are considering a fixed rate loan with a two-year term, the first step is comparing what options are available to you. Here are some features to keep in mind.
Interest rate. This rate will stay in place for two years, so make sure it is competitive.
Fees. Is there an establishment fee? What about monthly or annual fees? These can significantly add to the cost of the loan over a two-year period.
Eligibility criteria. Are you eligible for the loan? This is one of the most important aspects to take into account. Check minimum age, employment and financial criteria.
Weigh up the benefits and drawbacks of these loans
Your repayments will remain the same for the entire two-year term
Fixed two-year terms will see your debt repaid in a relatively short period
Fixed rate personal loans generally come with more restrictive repayment terms, including charges or limits for additional repayments
Depending on how much you borrow, your ongoing repayments may be high
Still have questions about fixed rate personal loans?
You can apply for a fixed rate personal loan with terms of one, two, three, four, five, six or seven years.
Generally, no. Lenders place restrictions on fixed rate personal loans because you benefit by locking in a rate. However, restrictions on repayments differ between lenders, so check reviews on finder.com/nz before you apply.
The eligibility criteria differs between lenders. You will generally need to be over the age of 18, receiving a regular income and have good credit. Check the minimum eligibility criteria before you submit your application.
Elizabeth Barry is Finder's global fintech editor. She has written about finance for over five years and has been featured in a range of publications and media including Seven News, the ABC, Mamamia, Dynamic Business and Financy. Elizabeth has a Bachelor of Communications and a Master of Creative Writing from the University of Technology Sydney. In 2017, she received the Highly Commended award for Best New Journalist at The Lizzies. Elizabeth has found writing about innovations in financial services to be her passion (which has surprised no one more than herself).
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