Variable-rate loan

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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 ?
In contrast, the serious delinquency rates reached nearly 22 percent for subprime fixed-rate loans and topped 46 percent for subprime variable-rate loans.
We have a good balance of variable-rate loans with over 66% of our first-mortgages and 42% of all our loans being variable-rate.
The payments are determined by the amount of public debt financed with variable-rate loans.
Borrowers with variable-rate loans before July 2006 could convert to consolidation loans with interest rates as low as 2 percent, Kantrowitz says.
Applied to each of his four loans, this would have amounted to tens of thousands of dollars in extra interest payments had he gone with fixed-rate mortgages instead of the variable-rate loans he chose.
6 percent in interest on your variable-rate loans by applying within six months of your graduation.
They were secured on homes whose prices failed to go up, so there was little or no equity to support a refinancing to help with fast-rising repayments on variable-rate loans.
Real estate loans were a little over $8 million, which were nearly evenly divided between fixed and variable-rate loans.
There has been a sharp increase in both variable-rate loans and mortgages without any principal payments for several years.
The Council of Mortgage Lenders' warning about the possibility of huge rate rises to curb house price inflation will have shaken borrowers with variable-rate loans.
Every time Clinton and Crazy Al raise the rates banks charge each other, in turn the banks leap on it and raise the variable-rate loans they have outstanding.
But new loans, variable-rate loans and overdrafts were hit immediately.

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