Loan on Floating Interest Rate and Fixed Interest Rate Difference

Pros and Cons of Fixed Interest Rate Loans

✅ Pros:

1. Stability in Repayments:
   The biggest advantage is certainty. You know your EMI from day one until the end of the loan.

2. Budget-Friendly Planning:
   Ideal for salaried individuals or those with fixed monthly incomes.

3. Protection Against Rate Hikes:
   If interest rates rise in the market, your EMI won’t be affected.

❌ Cons:

1. Higher Initial Rates:
   Generally 1-2% higher than floating rates.

2. Lack of Flexibility:
   You won’t benefit from a fall in market rates.

3. Prepayment Penalties:
   Fixed loans often attract penalties on early repayment.

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