Definition
Fixed rate
A fixed interest rate stays the same throughout an agreed period, regardless of changes in base rates or the wider market. Fixed-rate personal loans are the most common type.
Example
A five-year personal loan at a fixed rate of 7.9% APR means your monthly payment stays the same for the full term.
Common misunderstandings
- Fixed-rate products can have different terms — a two-year fix is not the same as a five-year fix.