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Sunday, July 6, 2014

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Take credit for making a big purchase or small has managed to make a purchase. Right from the house to the car, to professional courses for the latest gadgets, all purchased at EMI today. And the interest rate at which you borrow, determine how much EMI you will be required to pay each month, to pay the amount of your loan. There are different types of interest rates like fixed rate, variable rate, fixed cum floating rate and the interest rate reset. This rate comes with their own set of advantages and disadvantages.

What is a fixed rate?

Fixed interest rate is the interest rate that the borrower when your cost is constant or not changed during the tenure of the loan. In other words, the interest rate will not change even if the market price on a particular type of loan either up or down.


Simple and Stable

If the home loan or personal loan is at a fixed rate, you will know exactly how much EMI you need to pay every month. It's peaceful to know that at the end or beginning of each month, you need to pay the "n" amount of money, which remains the same during the life of the loan. This does not change that helps you become more stable and plan your finances well in the subject. Moreover, this way you will only take a loan if you can manage to pay their EMIs remain.

easy to Manage

EMI payments are still comfortable. When the borrower knows exactly how much money will flow out on a monthly basis, the payment becomes easier. Improved financial planning when you become more pro-active in your savings. Also, if you have a bulk of money available, you can count the number of EMIs 5-6 together, because interest rates are the same. This not only helps in faster loan repayment, but it helps in saving the amount of additional interest as well.

Affected By Market Price

These types of loans are not affected by the level of market borrowing. Therefore, if you are looking for security and stability, applying for loans that come with a fixed interest rate. In the case of adjustable or variable rates, market conditions determine whether the amount of EMI you will get increased or decreased.


Difficult To Obtain

There is no doubt that this loan does not come with a well-defined boundary, more confident and stress-free to manage. But at the same time, it is difficult to borrow money, the lender or bank.

Some Loss Desired

Usually the interest rate can not be changed, when there is a general shift in the price, as government policy or other reasons. In the case of a flexible interest rate, as in the case of personal loans, if the rate of change of the interest, the borrower must pay the new rates which may or may not be beneficial for consumers.

If the decrease in the interest rate, the borrower confused because he / she ended up paying EMIs higher than those who have got a loan at a lower interest rate, although this happens very rarely and after a very long duration. Or if the rate increases, the borrower has to borrow at a fixed rate stand to gain because he / she does not have to pay interest rates rise.

I would like to write articles on various topics on finance from home loans to EMIS and the current market scenario. If you want to take advantage of all types of loans, there are many sites like that can guide you, or can directly contact at custamer service through this number 855-757-3412 to process credit easily.


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