Fixed Rate Loan provides another way to obtain finance for your business, with the added security of always knowing what your payments will be. It also makes budgeting easier because you can complete your cash flow forecasting and planning without the added pressure of trying to manage interest rate fluctuations.
Pros:
- Repayments don’t fluctuate even if the official interest rate rises
- Provides peace of mind for borrowers concerned about rate rises
- Allows more precise budgeting
Cons:
- Repayments do not fall if rates fall
- Allows only limited additional payments
- Penalises early payout of the loan