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Compare Fixed and Floating Interest Rates for Personal Loan – What is Better for You?

By Finserv MARKETS - Feb 5,2019
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Fixed Rate and Floating Rate

When you plan to apply for personal loan, there are a lot of aspects that you need to consider. It could be the loan amount, repayments terms, loan tenure, pre-payment charges, interest rate etc. Among all these, the personal loan interest rate is a crucial factor that directly affects your finances. While completing the formalities of a personal loan application, you might have to choose between a fixed rate of interest or a floating interest rate. To know which one is better for you, it is necessary to understand them first.

What is a fixed interest rate?

In a personal loan with fixed rate of interest, the interest rate remains the same and therefore your EMIs are constant across the tenure of the loan. The market fluctuations or volatility have no effect on your personal loan interest rate.

What is a floating interest rate?

When you opt for a floating rate of interest, your interest rates can change any time during the tenure of your loan based on the changes in the market conditions.

Difference between Fixed and Floating Interest Rates for Personal Loan

A floating rate of interest is lower as compared to a fixed rate which means it helps you save money. Moreover, in the case of market fluctuations, if the market rate goes below the base rate, you can enjoy much lower interest pay out. However, a floating rate of interest would constantly alter your monthly expenditure which could disturb your finances.

A fixed rate of interest gives you a certainty in terms of your expenditure and helps you plan your budget well. It ultimately helps you in planning your finances in advance as you know the precise EMI pay-out every month. However, in addition to being comparatively higher, you would not be able to enjoy lower rates caused by fluctuations in market rates. Visit us to know Bajaj Finance Personal Loan Interest Rate.

Fixed Interest v/s Floating Interest Rate table

Let us have a look at some of the basic differences between fixed interest rate and floating interest rate:

Compare Fixed and Floating Interest Rates for Personal Loan – What is Better for You?
Now that you are aware of the fundamental differences between both these types of interest rates, ensure that you opt for an interest rate that best suits your needs. Also, before you apply for a personal loan, you must compare various loan offers provided by different lenders. Settle for a lender that offers the most competitive interest rate. This will help you reduce the overall cost of borrowing in the long run. You can apply for an instant personal loan online at Finserv MARKETS in a hassle-free way. Attractive interest rate, flexible repayment tenure, instant approval and quick disbursal are some of the added advantages of Bajaj Finserv Personal Loan.

Which one should you choose?

This depends on you! If you want a consistent monthly EMI pay out, avail a personal loan at a fixed rate of interest. You will have no risk of an increase in the EMIs even if the market conditions change. However, opting for a floating rate of interest could be beneficial, if you plan to pre-close your loan or have availed a short-term loan. This is because interest rates are unlikely to change drastically over a short duration.

How to apply for Personal Loan with Finserv MARKETS?

  • Enter your personal and employment details online
  • Select the loan amount you wish to avail and also selected your feasible tenure duration.
  • Submit the form and get an approval within just 3 minutes!

 

 

Visit Finserv MARKETS to understand how to get a Personal Loan and enjoy various benefits like attractive EMI, zero hidden costs and instant approvals to name a few. What’s more? Your online personal loan application can be approved within just 3 minutes and the loan amount will be credited to your bank account within just 24 hours!

“Finserv MARKETS, from the house of Bajaj Finserv is an exclusive online supermarket for all your personal and financial needs. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere!”

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522