A fixed rate loan has a predetermined interest
rates and set payment amounts. The positive side is that the
payment stays fixed, even if interest rates skyrocket. The
downside is that your interest rate is locked in, even if
interest rates overall fall significantly. With a variable
rate loan, your payment would decrease if interest rates
fell. If you’ve selected a fixed rate loan, you’d
have to refinance or renegotiate the terms of the loan to
take advantage of falling interest rates. If you have a poor
credit rating and don’t qualify for a fixed rate loan,
don’t despair. By making payments on time - every time
- you’ll likely put yourself in a position to qualify
for a fixed rate.
|
