Fixed interest rate loan

A fixed interest rate loan is a loan where the interest rate doesn't fluctuate during the fixed rate period of the loan. During this fixed-rate period, the borrower’s interest payments do not change, allowing future repayments to be predicted with a high degree of certainty. Variable rate loans, by contrast, are anchored to the prevailing discount rate. A fixed interest rate is a specific, fixed interest tied to a loan or a line of credit that must be repaid, along with the principal.

A fixed rate is the most common form of interest for consumers, as they are easy to calculate, easy to understand, and stable – both the borrower and the lender know exactly what interest rate obligations are tied to a loan or credit account.

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