Variable-rate loan

(redirected from Variable Rate Loans)

Variable-rate loan

Loan made at an interest rate that fluctuates depending on a base interest rate, such as the prime rate or LIBOR.

Variable-Rate Loan

A loan with an interest rate that changes periodically. Generally speaking, a variable rate loan is linked to some major benchmark rate; for example, the interest rate may be stated as "LIBOR + 1%." The loan may or may not have a cap on how much the interest rate can rise or fall, or on how often the interest rate may change. Very often, the initial interest rate for a variable-rate loan is lower than that for a fixed-rate loan. This allows more people to qualify for a loan; however, this kind of loan can be risky because the interest rate (and therefore the monthly payment) can rise unexpectedly. See also: Adjustable-rate mortgage.
References in periodicals archive ?
The first interest rate rise in 10 years, last November, has already impacted home buyers on variable rate loans.
We have also lowered the frequency of foreclosure assumptions for variable rate loans and holiday homes, reflecting the improved performance for these assets.
82%, again primarily driven by commercial loan growth as well as higher rates on variable rate loans.
For the time being, low interest rates and a high proportion of variable rate loans support the debt-servicing capacity of Austrian enterprises and households, which continue to face considerable interest rate risks, though.
Among commercial lenders, DBS is the clear leader, with a range of products including fixed and SIBOR-linked variable rate loans, as well as HDB loans that are cheaper than those available directly from HDB for the first five years.
5% on variable rate loans despite these institutions being able to obtain money for as little as 1%.
50 percent on new variable rate loans under the Canada Small Business Financing Programme.
Farm Plus Financial specializes in providing agriculture real estate based farm loans ranging from variable rate loans, to fixed rate loans, to lines of credit that may be used for farm operating and expansion purposes.
The "Hybrid Loan" is unique and combines favoured features of both fixed and variable rate loans in that it minimizes the amount of total interest paid over the life of the loan relative to longer term fixed rate products, and it reduces the size of monthly payments compared with shorter term fixed rate products, it aid.
Thus banks extending variable rate loans to borrowers are in a position to guarantee a positive net interest margin by ensuring that the interest rates they charge are tied to their cost of funds, with a positive premium built in.
Debtors (and investors) whose floating or variable rate loans are pegged in some way to Libor also benefit.
He thinks borrowers on standard variable rate loans are thinking of locking in a new deal before rates rise.

Full browser ?