Before availing of an easy personal loan, you must understand the vital concepts of floating interest and fixed interest. Understanding these terms is essential as they can have a crucial impact on your EMIs. You can apply for personal loan here: https://www.smfgindiacredit.com/personal-loan.aspx

Fixed interest rate loans have an interest rate that doesn’t change during the loan term. It stays the same when RBI changes its policy. In this way, the borrower can accurately predict future payments. Those who do not want any fluctuations in the interest rates prefer fixed interest rates. If the market is at a falling interest rate cycle or an expected hike in interest rates soon, it is feasible and logical to lock the deal at the current lower fixed interest rate. But keep in mind that the fixed interest rates are 1-2.5% per month higher than the floating ones.

Floating interest rates reflect economic or financial market conditions by fluctuating or “floating” over time. The RBI determines the base rate and applies a variable element to arrive at the final rate. The last interest rate changes by default when the RBI changes the base rate. So, those willing to take market fluctuations as a challenge or have a good knowledge of the market can surely take up floating interest rates. Also, if the market is at the end of a rising interest cycle or you expect rate cuts to be announced by the RBI shortly, the only reasonable rate for you is fluctuating. It helps you enjoy a 1-2.5% lower interest. But it is subject to changes in the RBI’s policies.

So, considering the tenure and amount of your easy personal loan, choose the best loan offer.

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