Fixed vs Variable Rates – Which Loan Option is Right for You?

When you apply for a car loan, business loan, or personal loan, one of the biggest decisions you’ll make is whether to choose a fixed or variable interest rate. As an experienced broker, Sherlock Loans helps clients understand the pros and cons so they can make the right choice.

What is a Fixed Rate Loan?

A fixed rate means your interest rate stays the same for the agreed period. Your repayments won’t change, making it easier to budget.

Advantages:

• Repayments stay consistent.

• Protection from interest rate rises.

  
  

Disadvantages:

• Less flexibility if you want to make extra repayments.

• You could miss out if rates drop.

  
  
  
  

  

  The right rate for you

  
  

What is a Variable Rate Loan?

A variable rate moves with the market. If rates go down, your repayments decrease—but if they rise, so do your costs.

Advantages:

• Flexibility to make extra repayments.

• Potential savings if rates fall.

  
  

Disadvantages:

• Harder to predict long-term costs.

• Can strain your budget if rates rise sharply.

  
  

Which is Better?

There’s no one-size-fits-all answer. For example:

• Buying a car for everyday use? A fixed-rate car loan might provide peace of mind.

• Expanding a business? A variable business loan could give you flexibility to repay faster.

• Consolidating debt? A fixed personal loan can lock in predictable repayments.

  
  

How a Broker Helps You Decide

A broker like Sherlock Loans looks at your goals, financial situation, and market trends to recommend the right loan type, and can even find hybrid options with both fixed and variable portions.

Final word: The right choice comes down to stability versus flexibility. With the help of a professional broker, you can secure a car loan, business loan, or personal loan that fits your lifestyle and long-term plans.