Through the simulation above, you can see that there is a choice of the type of interest used in the credit in the “Loan Type” column.

There are still many prospective debtors who feel strange when they hear the types of flowers. Are you also still confused about the two types of credit interest?

Which types of interest rates are more profitable? Let’s see together what is the difference between fixed rate and the following floating rate loans:

 

Fixed Rate of Credit

Fixed Rate of Credit

A fixed interest rate, also known as fixed rate or fixed interest, is an interest rate with a fixed amount, which does not change over a certain period.

Banks often combine fixed and floating interest rates. For example, in the first few years banks generally gave a fixed interest rate, then imposed floating rates in the following years.

 

But in fact both have advantages and disadvantages of each. The advantages of this fixed rate are as follows:

  • The certainty of the nominal installments that must be paid every month for a certain period.
  • If you find that you have excess money and pay off your credit in the middle of the loan period, you will not be charged a penalty.

In addition to various benefits, of course the fixed interest rate ( fixed rate ) also has several weaknesses, including the following:

  • The installment value tends to be higher than the installment with a floating rate .
  • With fluctuations in market interest rates, when interest rates decline, you are still obliged to pay according to the fixed interest rate agreed upon beforehand.

 

Floating Rate

Floating Rate

A floating rate is an interest rate that depends on market interest rates and bank policies, so it is volatile.

Generally floating interest rates will follow the BI rate . If the BI rate rises, interest rates will also increase. For example, bank A’s mortgage interest rate last month was 11%, two months later this interest rate could have changed to 9%. Changes occurred due to bank policies and the current economic situation.

 

Based on the conditions set by Daisy Rose Bank, the floating interest rate must be included and you can see it on the website of each bank.

The advantages of this floating rate are: Because it follows fluctuations in market interest rates, when interest rates on the market decline, the floating credit interest will also decrease.

Unfortunately this advantage can also be a disadvantage when market interest rates are rising. Automatic floating interest rates will also rise, and you still have to bear it.

 

Comparison of Fixed Rate and Floating Rate

Comparison of Fixed Rate and Floating Rate

After looking at the explanations of the two, the following is a summary of the comparison of fixed rate and floating rate interest :

No. Information Fix interest Floating flowers
1 Characteristics
  • Fixed interest rates for certain periods
  • Not affected by market interest rates ( BI rate )
  • Interest rates change
  • Influenced by market interest rates ( BI rate )
2 Advantages
  • The certainty of the nominal installments that must be paid every month
  • There are no fines or accelerated settlement penalties
  • The installments tend to be higher than installments with floating interest rates
  • When market interest rates decline, you are still obliged to pay according to the fixed interest rate previously agreed upon
3 Deficiency When the market interest rate ( BI rate ) falls, the floating interest rates come down
  • There is no certainty of the nominal installments that must be paid every month
  • When the market interest rate ( BI rate ) rises, the floating interest rates go up