Are interest rates fixed or variable?
Fixed Interest Rate
- You know exactly how much your repayments are each month.
- You can plan and budget with certainty, knowing your repayments won’t change.
- You’re protected from future interest rate rises.
- If the market interest rate falls, you pay more interest with a fixed rate.
- Some lenders may insist upon a shorter lending period.
- Fixed rate personal loans may not have a redraw facility.
- If you want to pay back your loan early, you could be stung with a higher early repayment fee. But remember, Plenti will never charge you fees or penalties for paying your loan back early.
Variable Interest Rate
- If the market rate drops, you could pay less for your loan overall.
- Most lenders offer longer repayment terms with a variable interest rate.
- You may have the option to make additional repayments which could save you money over the life of your loan.
- You may be able to redraw from any additional repayments you have made if you need some extra cash along the way.
- If the market rate rises your repayments increase.
- Interest rate rises are unpredictable and could make it harder to budget and make plans for the future.