Fixed vs Floating Interest Rates On Personal Loans

Whether you wish to fund your higher education or your marriage expenses, personal loans are a great option. Lenders charge a higher interest rate since they are unsecured loans. 

You have two options when it comes to the interest rates. You can either choose fixed or floating interest rates. Your choice will impact your EMI amount. Let us look at the features of each so that you can make an informed decision. You can also use a personal loan interest calculator to get an idea about the EMI.

Fixed Interest Rates On Personal Loans

When you go for a fixed interest rate, it will remain unchanged throughout the tenure of the loan. It means that you will be able to know your EMI amount beforehand. That will let you plan your future expenses accordingly.

Flexible Interest Rates On Personal Loans

Flexible interest rates vary according to changes in the market conditions. So, they might increase or decrease during the loan tenure. Floating rates have two components - index and spread. The central lending institution decides the index. Your lender cannot charge anything below it. Whereas the spread is the margin of the lender that varies according to your risk profile.

Whichever rate you choose, select the 'personal loan online apply' option for faster approval.

Which One To Choose? 

If you do not wish to take risks, it is better to go for fixed interest rates. However, going for a flexible might be profitable if the market favours you. 

Fullerton India offers personal loans at competitive rates. You will get a host of repayment options according to your convenience. So, do not delay the application if you are in urgent need of funds. 

Must Read: Difference Between Fixed And Floating Interest Rate For Personal Loans