Fixed Rate Personal Loans
Loans can come with two different types of interest rates: fixed rate personal loans or variable rate.
With a fixed-rate loan, your interest rate remains the same throughout your term. Since your interest rate determines your monthly payments, a fixed-rate loan means your monthly payments will always be the same.
With a fixed interest rate, you don’t have to worry about your payments going up or down. These generally offer more predictability and safety than variable-rate .
Types of Fixed Rate Personal Loans
Nearly any types available with a fixed interest rate, including:
- Student Loans
- Personal Loans
- Mortgages
- Secured Personal Loans
- Unsecured Personal Loans
- HELOCs
- And More
Lenders will often give you the opportunity to choose between fixed and variable interest rates.
In most cases, fixed-rate are a safer option. Though, variable-rate are generally a better choice if you expect to be able to repay your balance quickly.
Benefits of Fixed-Rate Personal Loans
Fixed-Rate products offer a number of great benefits, including:
- Wide availability
- Predictability
- Consistent monthly payments
- Flexible repayment options
- Favorable interest rates
- And more
Generally speaking, fixed-rate are a great option for borrowers that value predictability over the possibility of saving money on interest.
How Much Do Fixed-Rate Loans Cost?
The total cost of your fixed-rate is dependent on several factors, including the type, balance, interest rate, fees, and the term.
Interest Rate: The great thing about fixed-rate is that it makes it easy to calculate the total cost of your debt once you have an offer. Your interest rate will be determined largely by your credit history and income. You can also reduce your interest rate by providing collateral to secure your contract.
Borrowing Limit: Your borrowing limit will depend primarily on what type you take out and the lender that you choose. For example, student debts often have limits dependent on your school’s cost of attendance. Alternatively, personal options are typically available in amounts up to $50,000.
Term: A lower interest rate might not save you any money if it comes with a much longer term. While a longer term may lower your monthly payments, it could end up costing you more in the long run.
Fees: Lenders may charge a variety of fees, including origination, late payment, prepayment, and other fees. Be sure to understand all the fees that your lender charges so you aren’t caught off guard after signing your agreement.
Once you have all of these numbers, you can use an online calculator to calculate your monthly payments as well as the total cost.
Tips for Applying for all Types of Fixed Rate Personal Loans
Applying isn’t a difficult process, but it’s important to be prepared and know what steps you can take to find the best rates and terms possible.
If you’re ready to apply for a fixed-rate loan, keep these tips in mind to help you find the best option for your needs.
Determine What Type You Need
First things first, you need to determine what specific type of fixed-rate loan you need.
Need help paying for school? A private or federal student is generally your best option.
Need money to finance home renovations? A personal debt is probably the best choice.
Trying to get your business off the ground? Small business options are what you’re looking for.
Before you start looking for lenders, you need to know exactly what type you’re looking for.
Get Quotes
Once you know what you’re looking for, it’s time to start looking for lenders.
As you search for the perfect lender, be sure to get and compare quotes from at least three or four different providers. This will help ensure that you get the best interest rates and terms possible.
Don’t settle for the first option you find.
Apply
Now, all that’s left is to apply. You’ll likely need the following documents to complete your application:
- Identification
- SSN
- Bank statements, pay stubs, tax returns
- Proof of employment
- And more
Check with your lender for a more comprehensive list of documents.
If you’re approved, be sure to review your offer one last time to make sure you agree to the terms. If you do, you can sign your agreement and receive your funds.