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Is a fixed interest rate loan better than a variable interest rate loan?
Wiki User
∙ 16y ago
In my own opinion yes, but this is because interest rates have been ridiculously low and I'd want to lock down terms going forward. The risk of a variable interest or balloon loan is that your payments can go up and down, and if interest rates go up then your payments could be much more than you're paying now. This creates serious problems for consumers who can afford paymets during low interest periods and are not prepared for larger payments when interest rates go up. If you're a gambling person, you can consider a variable interest rate, but with current rates so low I would suggest your locking in for long-term contracts.
Wiki User
∙ 16y ago
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Can you change from a variable loan to a fixed loan?
If agreed by the Bank/Loaner - fixed load has fixed interest
Are low interest loans better than high interest loans?
In general, a low interest loan is better than a high interest loan. The only time this may differ is if you are getting a variable rate loan, which may become lower than a higher fixed rate loan over time. However, this can be hard to predict, so it is always better to go with the low interest rate.
Are loans online better than a traditional bank loan?
The interest rate will determine whether an online loan or bank loan is your best bet. Either way, opt for a fixed-rate loan, and not one whose rate is variable.
What are fixed mortgages and what do they do?
You can get a loan with a fixed interest rate or a variable interest rate. The interest rate is the extra amount of money you have to pay back for taking out the loan. A fixed rate doesn't change the entire time you have the loan--even if the economy fails and everybody else has to get higher interest rates. However, the rates are usually set up higher and you end up paying more in the long run if you have a lengthy loan. If the economy does poorly, you might save money in a fixed rate because variable rates will spike.
What is the difference between A variable rate home loan and a fixed rate home loan?
The lender can change the rate on a variable rate loan. A fixed rate stays the same for the life of the loan.
Can you change from a variable loan to a fixed loan?
If agreed by the Bank/Loaner - fixed load has fixed interest
Can I Increasingly Draw Down Business Loan With Fixed Interest Rate?
A business loan with variable rate of interest would better suit this purpose. You cannot increase the principal balance of the Business Loan having a fixed interest rate throughout the fixed rate of interest period. If several drawing is needed as the rates are fixed for time, break costs might be incurred.
Are low interest loans better than high interest loans?
In general, a low interest loan is better than a high interest loan. The only time this may differ is if you are getting a variable rate loan, which may become lower than a higher fixed rate loan over time. However, this can be hard to predict, so it is always better to go with the low interest rate.
Is mortgage payment a variable cost?
Mortgage payment can either be fixed or variable cost. A fixed cost means the interest rate charged on the loan will remain the same for the loan's entire term. A variable cost means the interest rate changes or decreases as time pass.
Can I Fix The Rate On My Small Variable Rate Business Loan?
In case you wish to fix your rates of interest, the lender can convert your variable loan to some fixed loan. A renegotiation fee may apply and also the appropriate documentation should be executed prior to the fixed rate of interest is applicable.
Are loans online better than a traditional bank loan?
The interest rate will determine whether an online loan or bank loan is your best bet. Either way, opt for a fixed-rate loan, and not one whose rate is variable.
What are the cons of having a fixed rate personal loan?
Fixed personal loan interest rates are typically higher than variable rates. If interest rates rise, your personal loan rates will look like a bargain, but on the other hand,if interest rates fall, your bank loan will look expensive.
What are fixed mortgages and what do they do?
You can get a loan with a fixed interest rate or a variable interest rate. The interest rate is the extra amount of money you have to pay back for taking out the loan. A fixed rate doesn't change the entire time you have the loan--even if the economy fails and everybody else has to get higher interest rates. However, the rates are usually set up higher and you end up paying more in the long run if you have a lengthy loan. If the economy does poorly, you might save money in a fixed rate because variable rates will spike.
When is it better to use a variable loan instead of a fixed rate loan?
I'm not sure it's ever "better". If you have a crystal ball, and can predict exactly what the economy and banking are going to do over the life of your loan, you might well see that a variable rate loan would be in your best interest. But while you may pay out more in the long run, a fixed rate loan is much safer. There's a lot to be said for that. And if, perchance, you are getting ready to buy a house right now, for heaven's sake go with a fixed rate loan! You can't lose!
What is the difference between A variable rate home loan and a fixed rate home loan?
The lender can change the rate on a variable rate loan. A fixed rate stays the same for the life of the loan.
How can you change from fixed interest rate to variable interest rate before the contract period for fixed rate is over?
You will have to check with your loan supplier. they are the only people who can fully answer that question. Different banks have different rules.
What are the benefits of fixed interest rate mortgages?
A fixed interest rate mortgages means that one pays a fixed amount of interest each month which is the same. The benefits are that one always knows how much is being paid as it is not variable. The amount depends on the amount of loan borrowed and the length of the loan term. If the interest rate changes, then this will not affect the amount being paid each month.
