Answers.com > Wiki Answers > Categories > Business & Finance > Business and Industry > Business Finance > Merchant Accounts > Accepting Credit Cards > Is a fixed interest rate loan better than a variable interest rate loan?

Is a fixed interest rate loan better than a variable interest rate loan?

In: Accepting Credit Cards, Personal Finance, Loans, Money Management [Edit categories]

Answer:

In my own opinion yes, but this is because interest rates have been ridiculously low and I'd want to lock down terms going forward. The risk of a variable interest or balloon loan is that your payments can go up and down, and if interest rates go up then your payments could be much more than you're paying now. This creates serious problems for consumers who can afford paymets during low interest periods and are not prepared for larger payments when interest rates go up.

If you're a gambling person, you can consider a variable interest rate, but with current rates so low I would suggest your locking in for long-term contracts.

First answer by ID0406386319. Last edit by Jen12345. Contributor trust: 42 [recommend contributor ]. Question popularity: 1 [recommend question].

[report abuse]

Can you answer these Accepting Credit Cards questions?

	Does amazon accept credit cards?	Answer it!
	How many different type of credit cards?	Answer it!
	Why the profitability index is more appropriately describes as a variation on the net present value technique than on the internal rate of return technique?	Answer it!
	What is the difference between allowing customers to purchase goods on credit and credit card?	Answer it!
	What does it mean to compile receipts?	Answer it!

Relevant answers:

Is fixed interest rate better than variable interest rate for banks?
Yes, because a variable interest rate can go up as high as 9% APR when you can get a fixed APR of 3.5%. Also with variable interest your payments will always jump around and with fixed your payments...
What is the interest rate on a private loan?
Private loan interests rates are averaging at about 10% today. Interests rates often fluctuate, as some increase, and other offers are made available over time.
What are the interest rates on fast loans?
Interest rates vary daily on fast loans just like they do on every other loan available. You will find that fast loans are much much higher in rates due to the nature of the loan and that business.
What are interest rate loans?
Financials charge a certain percentage rate to allow for profit, risk and the ability to give you money. The rate is dependant on credit, term and amount.
What are the interest rates for a quick loan?
The interest rates for a quick loan depend on who you obtain the quick loan through. Huntington is sitting at about 2.99% right now for the quick loan rate.