Join UsThere are numerous reasons why a fixed term loan could be the perfect fit for your financial needs. Before we delve into the benefits of choosing a fixed term loan, let’s first understand what fixed term and variable loans entail and the differences between the two options.
What is a fixed term loan?
A fixed term loan is a type of loan where the interest rate and monthly payment amount are set for the entire loan term.
What is a variable loan?
A variable loan has an interest rate that can fluctuate based on market conditions, meaning that your monthly payment amount can vary over time.
Fixed-term loans vs. variable loans
Fixed-term loans are set over a fixed period of time, typically 5-years, 7-years, and 10-years. The interest rate and monthly payment amount are fixed for the entire term of the loan, so you know exactly how much you will need to pay each month. This can be helpful for budgeting and planning your finances.
Variable loans have an interest rate that can change over time, depending on market conditions. This means that your monthly payment amount could also change. Variable loans are often chosen for shorter-term borrowing, such as a car loan or a credit card.
At Croí Laighean Credit Union, we understand that life’s expenses can be both costly and unpredictable. We’re dedicated to helping you enjoy life and achieve your goals without putting a strain on your finances. That’s why our 5-year fixed term loan, 7-year fixed term loan, and 10-year fixed-term loan start with a competitive interest rate of 6% (6.17% APR).
Why choose a fixed-term loan?
There are several reasons why you might choose a fixed-term loan:
- Predictability: The fixed interest rate and monthly payment amount can give you peace of mind and help you budget your finances.
- Stability: Fixed-term loans can provide financial stability, especially during times of economic uncertainty.
Our fixed term loans start with a competitive interest rate of 6% (6.17% APR). This rate remains constant throughout the term, eliminating worries about economic fluctuations affecting your repayments. Use our loan calculator to find the right loan for you.
Why choose a variable loan?
Variable loans can also have some advantages, such as:
- Lower interest rates: Variable interest rates can be lower depending on the economic climate.
- Flexibility: Variable loans offer more flexibility than fixed-term loans, as you can make changes to your monthly payments or the length of the loan.
Which type of loan is right for you?
The best type of loan for you will depend on your individual circumstances and needs. If you are looking for predictability and stability, a fixed-term loan may be a good option. If you are looking for lower interest rates or more flexibility, a variable loan may be a better choice.
Here are some things to consider when choosing a loan:
- Budget: How much can you afford to repay each month?
- Financial goals: What are you using the loan for?
- Loan term: How long do you need the loan for?
- Your risk tolerance: How comfortable are you with the possibility of your interest rate or monthly payment amount changing?
If you are not sure which type of loan is right for you, talk to one of our lending experts. They can help you assess your individual circumstances and recommend the best loan option for you.
Benefits Of A Fixed Term Loan
The Freedom to Plan Ahead
A fixed-term loan helps you plan your budget with confidence. It’s great to know how much you need to pay each month, making it far easier to handle other financial responsibilities. This can help with managing your cash flow better and avoid late or missed payments.
Planning for the Future
The consistency of a fixed-term loan allows you to plan your weekly, bi-weekly, or monthly payments. When you know the set amount that will be deducted from your account each month, you can be organised and better prepared for unexpected events. It gives you the freedom to build a rainy day fund, or even save for a future holiday (nice!). Since the repayments never change, you can allocate the necessary funds each month, and this helps with budgeting.
Competitive Interest Rates
In times of economic uncertainty such as we are currently experiencing, fixed-term loans offer a reliable finance option, especially when interest rates are expected (and continue) to increase. You will get a marketing leading rate of 6% (6.14% APR) with our 5-year loan, and this interest rate will remain throughout the term, eliminating any worries about economic fluctuations affecting your repayments. And the best news of all is that our loans come with free loan protection insurance.
So, are fixed-term loans worth it? If you like to budget and plan ahead and don’t like financial change in your life, then a fixed-rate loan is the one for you. You can sit back and relax and you won’t need to worry about any unexpected repayment increases. Click here to learn about the features and benefits of the other loans we offer.
If you’re thinking of a fixed-term loan, we can help you. Contact us today to find out more or alternatively, drop into your local branch or call us on 1800 23 24 25.