Personal Loans are prevalent these days. Different rates regarding interest are imposed by different commercial banks these days. These rates fluctuate due to numerous factors. Most personal loans impose interest monthly, and some even impose this interest weekly.
When we talk of APR, the total interest rate that an individual will have to pay the bank over a year is the annual percentage rate.
Fixed Vs Variable Annual Percentage Rate
A fixed APR is one that has its rate constant, and it doesn't vary from a change in the index. On the other hand, a variable APR is one that will vary with the change in the interest index rate.
Which is better?
This is a complicated decision to make. When we talk of NBFC Growth in India, the variable Annual Percentage Rate was given preference by most people. To understand this concept, one must be aware of the different benefits of this different APRs.
Benefits of a Fixed APR
Such an Annual Percentage Rate can give numerous benefits as mentioned-
Benefits of variable APR
Variable APR also has numerous benefits-
In recent times people are switching from variable to fixed APR. The main problem out there is the sudden rise in interest these days, making variable APR very risky.
Read Also: How do you calculate annual percentage rate?
Aman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management.