What are the differences between fixed and variable loans?

What are the differences between fixed and variable loans?

Fixed loans have a constant interest rate throughout the loan term, while variable loans have rates that can change.

Which type of loan is better for long-term borrowing?

Fixed loans are often better for long-term borrowing as they provide stability in payments.

Are variable loans usually cheaper?

Yes, variable loans can start with lower rates, but they may increase over time, leading to higher costs.

What factors should I consider when choosing between them?

Consider your financial situation, how long you plan to borrow, and your risk tolerance regarding interest rate changes.