Floating Interest Rate | Fixed Interest Rate |
Difficulty in budgeting | Can maintain the monthly track easily |
EMIs keeps on changing | Fixed EMIs |
Higher risk | Lower risk |
Saving oriented | Security oriented |
Floating Rate | Fixed Rate |
Payments can fluctuate, making budgeting more challenging. | Payments are consistent, allowing for easy budgeting and planning. |
Borrowers or investors are exposed to interest rate fluctuations, which can be advantageous or detrimental. | Borrowers or investors are shielded from interest rate changes and their associated risks. |
Typically lower than fixed rates initially, making it more affordable at the outset. | Usually higher than initial rates for floating rate loans. |
Less predictable in the long term due to variable rates. | Highly predictable over the entire loan or investment term. |
Tied to market conditions, economic factors, and central bank policies. | Unaffected by market conditions once the loan or investment is established. |
What is difference between floating and fixed rate of Interest?
Rakesh Goyal
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April 14, 2021
2021-04-14T10:58:29+00:00 2023-10-15T22:35:08+00:00Comment
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