Fixed interest rate
A fixed rate stays the same for the entire life of the loan, so the monthly payment never changes. Most U.S. personal loans are fixed-rate.
Full definition
A fixed interest rate stays constant from the first payment to the last. The borrower's monthly payment is predictable, and the total interest paid over the life of the loan is fully known at signing. Most U.S. personal loans are fixed-rate. Fixed-rate loans transfer rate risk from the borrower to the lender, so they typically start a bit above an introductory variable rate.
- Written by
- Get Advance Loan Editorial Team
- Reviewed by
- Compliance Review
- Published
- January 15, 2026
- Last reviewed
- May 22, 2026
- APR (Annual Percentage Rate)APR is the yearly cost of borrowing, expressed as a percentage of the loan amount. It includes interest plus most lender fees, so it's a more complete measure of cost than the interest rate alone.
- Interest rateThe interest rate is the percentage of the loan balance charged per year as interest, excluding fees. It is a component of, but smaller than, the APR.
- Variable interest rateA variable rate can change over the life of the loan, usually tied to an index like the prime rate. Monthly payment can rise or fall.
- Prime rateThe prime rate is the benchmark interest rate U.S. banks publish for their most creditworthy commercial customers. Many consumer rates are quoted as prime + a margin.
- Loan termThe loan term is how long you have to repay the loan, usually expressed in months. Common personal-loan terms are 24, 36, 48, 60, and 72 months.
- PrincipalPrincipal is the original loan amount you borrowed, before interest. Each monthly payment goes partly to principal and partly to interest.
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