Is interest on University loans fixed or variable? If our operating margins drop, will Monash pay higher interest rates on its loans?
• No. In all cases the interest rates have been negotiated on a “fixed” basis, i.e. they are locked in for specified terms, generally to the final maturity date of the loan facility. No matter what happens with interest rates in the market, the rates on our facilities are fixed, in some cases for terms of up to 20 years. Obviously though, as new borrowings are undertaken, the interest rate applicable to those borrowings have to be negotiated in light of the market interest rates applicable at that time. • It is worthwhile mentioning that at present (Oct 2007) our weighted average interest rate for all facilities, including margins payable, is approximately 6.25%, with the weighted average term to maturity of all facilities in excess of 8 years. • All the loans are flexible in that they can be repaid before maturity without incurring penalties.
Related Questions
- Is there any kind of printed material I can get that explains how loans work, loan terminology, the implications of fixed vs. variable interest rates, and other technical matters?
- Do home equity loans or lines of credit have fixed or variable interest rates?
- Do business loans have fixed or variable interest rates?
