The Difference Between Variable and Fixed Interest Financing – Investment Video
rate. If you’re considering borrowing money, you should know about the differences between variable and fixed interest financing. This video will explain the difference between both and will tell you if one is better than the other.
The interest rate refers to the amount to be paid back with money borrowed. If the interest rate is fixed, it isn’t likely to change for the life of the loan. It’s easy and predictable. Interest rates that are variable can alter depending on the period you pay the loan. Usually, it’s tied to an international standard rate like LIBOR.
There’s a wealth of specifics about the international interest rates which you can or cannot research on your own. These details are not vital to your credit. You need to know that your lender as well as the lender cannot influence fixed or variable rates of interest. This is an independent measurement.
Fixed rates are typically an excellent option if the rates are particularly small or somewhere in between. Fixed interest rates can be an excellent option when you expect interest rates to rise. Find more information in the video.