Fixed Interest Rate

Fixed interest rate - unlike with an overdraft credit card or flexible loan - is a set rate of interest you pay at the time you borrow money.

Of course if you borrow when interest rates are high and they subsequently fall your loan may look expensive. The opposite is also true if you borrow at a time when interest rates are low; then you will continue to benefit from the low rate agreed at the time you borrowed even if interest rates rise.

The main advantage of having a personal loan with a fixed rate of interest is that you will know just how much you will have to repay each month and that this amount is fixed for the life of the loan.

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2009-02-17 00:00:00 © Moneyextra.com