Which personal bank loan is better at floating or flat rate?
Flat. Floating or adjustable rates sound good in the beginning but unless you are Merlin the Magician and can predict where interest rates are going to be for the life of that loan, you could wind up with a payment you can’t afford. Adjustable rates were sold to a whole lot of homeowners here in the U.S. over the last 4 or 5 years. Interest rates were low. People were refinancing their mortgage loans to get the lower interest rates using adjustable rate loans. Problem is, now that the interest rates have gone up on those loans, we now have one of the highest rates of foreclosure because in some cases, their payment has gone up several hundred dollars and they now can’t afford the mortgage. Be careful with floating loans. I’d rather have a flat rate locked in so I know what it’s going to cost me for the life of the loan and I don’t get a big surprise down the road if interest rates go up.
