Opt for Fixed Rate or Floating Rate Home Loan? Which is Best

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Opt for Fixed Rate or Floating Rate Home Loan?
Which is Best
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The Basics of Home Loan

• Now that you have applied for a home loan, you
  need to think about the right rate of interest.
  Well, a rate of interest is an important
  component to avail of a home loan. It plays a
  huge impact on your borrowing experience.
  However, there are two types of rate of interest-
  fixed rate and floating rate of interest. It
  completely depends on you to choose one based on
  your needs. If you need the right borrowing
  experience, make sure you choose the right type.
  Before that, make sure you have a complete
  understanding of both types to make the right
  decision.

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What is a fixed rate of interest?

• A fixed-rate of interest is the most common form
  of interest. This is very commonly found in
  various financial institutions. Here, the rate of
  interest is fixed from the time of loan approval
  to loan repayment end tenure. This rate of
  interest will not change under any circumstances.
  No factor can change the rate of interest. It
  remains fixed for the entire tenure. Factors like
  loan providers, market conditions cannot make any
  changes in the loan interest rate. This fixed
  rate of interest will help you manage your
  finances and there will be no ups and downs in
  the rates. The EMI will remain fixed without any
  changes. Read More Business loan in india.

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What is a floating rate of interest?

• A floating rate of interest is opposite to the
  fixed rate of interest. In a floating rate, the
  rate will keep changing throughout the loan
  tenure. It is subjected to various factors that
  are responsible to bring in change. The market
  conditions are completely responsible for this
  change in the rate of interest. You may get a low
  rate sometimes and then a high one as per the
  market conditions. The rate can go down or can
  rise too. However, this will affect the EMI. It
  will be difficult to understand your EMI and then
  take the right financial steps. When EMI goes up
  or down, there will be a lot of hurdles in
  managing your debt.

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Wrapping up

• In a nutshell, both fixed and floating rate has
  advantages and disadvantages. You need to think
  about your individual needs and financial
  condition before choosing one. Keep your home
  loan eligibility criteria right so that you can
  go for a fixed and low rate. Too many variations
  with a floating rate can affect your finances in
  a bad way.

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Clix Capital Services Private Limited

• Address 4th Floor, Kailash Building, Kasturba
  Gandhi Marg, Connaught Place, New Delhi-110001
• Call us 1800 200 9898
• Email us hello_at_clix.capital
• Website www.clix.capital

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