A fixed-rate loan locks your interest rate — and therefore your monthly payment — for the entire term. It's the default structure for US personal loans, most auto loans, and the conventional 15- and 30-year mortgage.
Why borrowers choose fixed rates
Predictability. A fixed-rate loan removes interest-rate risk: your payment in month 1 equals your payment in month 36 (or 360). That makes budgeting easier and protects you if benchmark rates rise after you sign.
When fixed rates are more expensive
Fixed-rate loans usually price slightly higher than introductory variable rates because the lender is taking on the rate risk you avoid. In a falling-rate environment, a variable-rate borrower benefits automatically while a fixed-rate borrower has to refinance to capture savings.
Frequently asked questions
Is a fixed-rate personal loan better than a variable one?
For most US personal-loan borrowers, yes — virtually all major lenders default to fixed-rate installment loans for exactly this reason.