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 ?
While the NIM benefitted from the repricing of variable-rate loans, this was partially offset by higher rates on non-core interest-bearing deposits and borrowings.
The bill would also allow existing borrowers with high fixed-rate federal loans to refinance into new variable-rate loans.
In contrast, the serious delinquency rates reached nearly 22 percent for subprime fixed-rate loans and topped 46 percent for subprime variable-rate loans.
In recent years, the Federal Reserve Board has worked to hold interest rates down to unusually low levels, to help banks build profits and reduce pressure on home buyers, corporate buyers and other borrowers who have taken out 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.
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.
From the parametric analysis, with the exception of unsecured variable-rate loans, loan-rate concentration relationships have in common a relatively sharp rise in rates starting at Herfindahl index values greater than 1667 and continuing to the highest observed values of the index.

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