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Quantifying Fixed Interest Rate

Quantifying-Fixed-Interest-Rate-FastAccessFinance -- Unsecured Personal Loan

When you approach a bank or a lending firm in Australia to take out a personal loan, one of the things you need to decide in the course of your application process is whether to choose a fixed interest rate for the borrowed money. The other interest rate option is the variable interest rate. But for the purposes of this article, the discussion will focus on the Fixed Interest Rate.

What is Fixed Interest Rate?

Personal loans and other types of loans may be negotiated for a fixed interest rate. Calzoncillos Boxer Calvin Klein This means that the interest rate being charged on the borrowed amount is a fixed rate as determined by the bank or lender. Regardless of any movement of interest rate in the market, whether it’s upward or downward, your monthly repayment amount which is calculated based on the fixed interest rate will not change for a specific period of time.

Frequency of Repayment

Many banks and lending firms in Australia offer repayment frequency options to borrowers. You may choose a monthly, fortnightly or weekly repayment schedule. Boxer Calvin Klein Baratos Whatever repayment frequency you choose, your repayment amount remains to be the same amount over the loan term.

Advantages of Fixed Interest Rate

For personal loans under a fixed interest rate, you are able to budget your fund allocations better because the repayment amount is fixed and not changing. Every repayment due, you can allocate the amount due and effect payment accordingly. Slip Calvin Klein Outlet Tangas Calvin Klein Baratos With the interest rate locked in for a certain period of time, you don’t have to worry if the interest rates in the market are going up. Boxer Calvin Klein Mujer Your repayment is locked in for the same amount within the specified period of time or over the term of the loan.


The main disadvantage in taking a fixed interest rate personal loan is that you cannot enjoy the savings on interest rate if the market dictates a lower interest rate. Boxer Calvin Klein Baratos Because your interest rate is locked in for a specific time frame, you will still allocate the same amount regardless if the prevailing interest rate in the market has gone down significantly. When this happens, you may opt to switch to the variable interest rate but be mindful that such a swap entails additional costs or expenses such as administrative or management fees, etc. Comprar Calzoncillos Calvin Klein Make sure you understand and know about this before you make any decision in this regard.

The decision to choose fixed interest rate for your personal loan will depend on your personal and financial circumstances. If you have the capability to make two repayments in a month without straining the monthly budget, then by all means, make your account officer know that you can pay fortnightly.

Posted in : Personal Loan
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