Quick answer
A fixed rate stays the same for the life of the loan, so your payment doesn't change. A variable rate can move up or down over time, so payments can change. Personal installment loans and home equity loans usually have fixed rates; HELOCs usually have variable rates, according to the CFPB.
The rate type decides whether your payment is a known number or a moving target.
How each works
| Fixed rate | Variable rate | |
|---|---|---|
| Rate over time | Stays the same | Can rise or fall |
| Payment | Predictable | Can change |
| Common on | Personal installment loans, home equity loans | HELOCs, many credit cards and lines of credit |
The CFPB says home equity loans usually have fixed rates and HELOCs usually have variable rates.
What a rate change does
| $10,000 over 60 months | Monthly payment | Total interest |
|---|---|---|
| 9.99% | about $212.42 | about $2,745 |
| 11.99% | about $222.39 | about $3,344 |
Arithmetic illustration, not an offer: if a loan's rate were 2 points higher for its whole term, it would cost about $598 more. Real variable-rate changes depend on the loan's terms.
How to choose
- Choose fixed if a payment increase would strain your budget, or the loan runs for years.
- Consider variable only if you understand how and how often it can change, and could absorb a higher payment.
- Compare APR, and read how the rate is set in your agreement.
See how the rate affects your schedule with the amortization calculator.
Want to compare real offers? Use the form on this page to see whether partner lenders may have an installment loan for you, with APRs on our network from 5.99% to 35.99%, or call (800) 236-7761.
Examples are illustrations, not offers. Approval, APR and terms depend on the lender, your state and your credit profile.
Frequently asked questions about fixed vs variable interest rates: pros and cons
Is a fixed or variable rate better?
A fixed rate is better if you want a predictable payment. A variable rate may start lower but can rise. Consider how long you will carry the debt and how much a higher payment would strain your budget.
Do personal loans have fixed rates?
Most personal installment loans are repaid in fixed periodic amounts. Check your loan disclosure.
Can I switch a variable rate to fixed?
Some HELOCs let you convert part or all of the balance to a fixed rate. The CFPB says the fixed rate is usually higher but more predictable.
Are credit card rates fixed or variable?
Check your card agreement. The CFPB says issuers generally must give 45 days' notice of significant changes such as certain rate increases.
Sources
- CFPB: What is a home equity line of credit (HELOC)? (accessed 2026-10-09)
- CFPB: What is a home equity loan? (accessed 2026-10-09)
- CFPB: Do personal installment loans have fees? (accessed 2026-10-09)
- CFPB: Can my credit card company change the terms of my account? (accessed 2026-10-09)
Last updated 2026-10-09. How we research and update pages.