Variable Rate vs Fixed Rate

[KarlHungus]

Hi all,
Just after a little advice. After a personal loan and are just wondering what would be the best type of loan to go for - variable or fixed? Are there major differences?

Can get a loan pretty easy with Commonwealth with interest rates of 14.5% (Fixed) and 14.15% (Variable). Will most likely go with another lender as there are more competitive rates out there. Any suggestions?

Thanks in advance.

 

[Scotland]

The best advice you can get is don't get a personal loan.

The major difference between variable and fixed is with variable the bank can change the interest rate whenever and however they like, and with fixed they cannot adjust the interest rate for the term of the loan. Early/additional repayment options are often limited with fixed rate loans too, though I'm not sure how this applies to personal loans specifically.

 

[saj_21]

Hi all,
Just after a little advice. After a personal loan and are just wondering what would be the best type of loan to go for - variable or fixed? Are there major differences?

Can get a loan pretty easy with Commonwealth with interest rates of 14.5% (Fixed) and 14.15% (Variable). Will most likely go with another lender as there are more competitive rates out there. Any suggestions?

Thanks in advance.

Interest rates are only going to go one way and that is up, if you lock in at 14.5% now i can guarantee rates will rise two or three times over the next 3 RBA meetings. Im not sure how much the Commonwealth will pass this onto Peronsal loans as they do home loans. But you may find after one interest rate rise from the RBA it will tip Commonwealths variable rate of 14.15% over the 14.5% you could of locked in.

As the previous poster said if you can avoid a personal loan then do it. If it is for a car forget about your just losing money, if its for an investment that could make you $$$ then may be worth the risk.

 

[bunsen burner]

Hi all,
Just after a little advice. After a personal loan and are just wondering what would be the best type of loan to go for - variable or fixed? Are there major differences?

Can get a loan pretty easy with Commonwealth with interest rates of 14.5% (Fixed) and 14.15% (Variable). Will most likely go with another lender as there are more competitive rates out there. Any suggestions?

Thanks in advance.

1. As the previous 2 posters have said, don't get a personal loan. Ever. If it's for a car - catch the bus until you can save up $2k for a 10 year old car. If you want your life to be much easier in 10 years time then lend money for appreciating assets. Down the track you can use investment loans to purchase a car and get 5-6% instead of 14%

2. Depends how long the term of the loan is. I've tried both fixed and variable and I prefer the flexibility of variable. But my circumstances would be different as well.