Variable Loan Definition

High interest rates make loans more expensive. When interest rates are high, fewer people and businesses can afford to borrow. That lowers the amount of credit available to fund purchases, slowing consumer demand. At the same time, it encourages more people to save because they receive more on their savings rate.

A variable-rate loan is one where the interest rate on the loan balance changes as rates in the market change, based on an index. As the interest rate changes, so does the monthly payment. Types of variable-rate loans include adjustable-rate mortgages, home equity lines of credit (HELOC), and some personal and student loans.

Variable | Definition of Variable by Merriam-Webster – Variable definition is – able or apt to vary : subject to variation or changes. How to use variable in a sentence.. The winds were light and variable. The loan has a variable interest rate. Noun. unemployment and other economic variables. See More.

Variable Rate Definition – Financial Smarts – Installment Loans – Variable rates are interest rates that can rise or fall periodically over the life of a loan. The rate will change based on market conditions. [1] Variable rates are based on a benchmark interest rate, also known as an "interest rate index", plus an additional margin that is selected by the lender .

A teaser loan can refer to any loan that offers a teaser rate. Some adjustable rate mortgages may also use variations of teaser rates in the variable portion of the loan. One example includes the.

A variable rate, or variable interest rate, is the amount charged to a borrower for a variable-rate loan, such as a mortgage. A variable rate is usually expressed as an annual percentage and fluctuates in tandem with a rate index.

5/1 Arm Rates Today 5-Year ARM Mortgage Rates. A five year mortgage, sometimes called a 5/1 ARM, is designed to give you the stability of fixed payments during the first 5 years of the loan, but also allows you to qualify at and pay at a lower rate of interest for the first five years.An Adjustable Rate Mortgage Adjustable Rate mortgage calculator [rate Change on Any Day] – With a fixed rate mortgage, the interest rate does not change over the term of the loan. But with an adjustable rate mortgage (sometimes called a variable rate mortgage) the interest rate is subject to change. Twenty of thirty years ago, when interest rates were.

Fixed Rate Loan vs. Variable Rate Loan Terms for Cars. – The Variable Rate Loan A variable rate loan is a loan where the interest rate can change, based on what’s called the prime rate. Banks and other lenders follow the U.S. prime interest rate, which is a consistent across-the-board guideline for what the best borrowers would receive from a lender in an "ideal" case.

Variable Rate Definition – Financial Smarts – Installment Loans – Credit cards, student loans, mortgages, and auto loans may all have variable interest rate options. How is a Variable Rate different than a fixed rate? Whereas variable rates change over time, fixed interest rates do not change at all. A loan with a fixed interest rate of five percent will always have an interest rate of five percent. If the.