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> > Variable Loan Rates
Most types of loans are available at both variable and fixed rates of interest, the major exception being real estate loans which are offered at variable rates only. Mortgage Calculator
Variable interest rates are highly unusual on consumer loans such as those for cars and trucks. Yet, the variable rate is the most popular option among the credit union members. Variable rates are periodically reviewed and set by the Board of Directors and are subject to change during the term of the loan. When variable rates change, the new rate becomes effective on all existing variable rate loans. Rates may move up or down over the term of the loan depending on what his happening with interest rates overall. When rates change, loan payments on consumer loans remain unchanged unless an adjustment is requested by the borrower. The loan is either repaid a little ahead of schedule or a small balance may remain at the end of the scheduled loan term. It all depends on how rates fluctuate over the life of the loan. Our members seem to like variable rates because they are normally lower than a fixed rate will be for the same length of loan term. Borrowers benefit from having the lowest rate when their loan balance is the highest. As the loan balance is paid down, any future increases in rates have less and less effect on the cost of the credit. In regard to payment adjustment, real estate loans are different. If the interest rates goes up on real estate loans, the payment is also adjusted. Due to the long-term nature of real estate loans, payment changes are needed to keep the repayment of the loan on schedule.
Real estate loan applications are not available on line.
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