Firstly, let’s discuss the differences between a variable loan and a fixed-term loan.
A fixed-term loan is a loan where the interest rate and payment schedule are fixed for the entire term of the loan – at Croí Laighean Credit Union, we offer 5-year, 7-year, and 10-year fixed-term loans.
This is beneficial as the borrower knows exactly how much they need to pay each month, and the interest rate will not change throughout the loan term. Fixed-term loans are typically used for larger amounts and can help borrowers plan their budgets and financial commitments more effectively.
A variable loan is a loan where the interest rate can fluctuate over time meaning the monthly payment amount may also fluctuate. The interest rate and payment amount may increase, or decrease, depending on market conditions and other factors. Variable loans are generally used for short-term borrowings.
A fixed-term loan from Croí Laighean Credit Union offers you a helping hand when you need it. Life can be expensive, and unpredictable – From redecorating your home, upgrading your home’s energy rating, or purchasing a new car. We are here to help you enjoy life and to achieve your goals without breaking the bank – that’s why we have 5-, 7-, and 10-year fixed-year loans available starting with an interest rate of 6% (6.17% APR).
Why choose a fixed-term loan?
The predictability of a fixed-term loan is a big plus. Borrowers know exactly how much interest they will pay over the period of a loan and the repayments stay the same throughout the duration of the loan. As the current economy is very unpredictable with rising interest rates, a fixed-term loan is very appealing!
Benefits Of A Fixed Term Loan
With a fixed-term loan, the borrower can plan their budget with confidence. They know exactly how much they need to pay each month and can factor that into their other financial obligations. This can make it easier to manage cash flow and avoid late payments or missed payments.
The Freedom to Plan Ahead
A fixed-term loan means that you’re repaying the same amount every month without any changes. This allows you to plan your weekly, fortnight, or monthly repayments. When you know what amount will be coming out of your account, it will allow you organise and plan for unexpected events, a rainy day fund, or even a holiday for the future. As the repayments never change you can have the repayment amount set aside every month, this will allow you to budget effectively.
Market Leading Interest Rates
In very uncertain economical times, it is without a doubt that fixed-term loans are the best financing option when interest rates are predicted to rise. Therefore the borrower is not exposed to any sudden changes in their repayments. Depending on the duration of the loan, interest rates start at 6% (6.14% APR) for 5 years. The interest rate will never rise, so there will be no concern regarding any economic changes.
So are fixed-term loans really worth it? If you are someone who likes to budget and plan ahead and doesn’t like financial change in your life, then a fixed-rate loan is the one for you. You can sit back and relax and not worry about any unexpected repayments. Thinking of a fixed-term loan? Contact us today to find out more. Drop into your local branch or call us on 1800 23 24 25.