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Can someone explain this to me?
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CT99099
Posts: 12 Forumite

Hi,
I’m currently trying to become debt-free and have been doing loads of research into it, as well as things like the types of debt. On one of the sites I’ve viewed a few times (I can’t seem to find the URL, otherwise I’d post it here to help you more) they kept on talking about “fixed rate debt”.
I’m currently trying to become debt-free and have been doing loads of research into it, as well as things like the types of debt. On one of the sites I’ve viewed a few times (I can’t seem to find the URL, otherwise I’d post it here to help you more) they kept on talking about “fixed rate debt”.
To be honest, I didn’t really understand what it was so I Googled it and only found search results for fixed rate bonds. Are these one in the same or am I missing something?
From what little I do know about bonds, I don’t think it would make sense in the context I was reading it in, but hey, I might (and probably am) wrong.
Thanks for any help in advance!
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Comments
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Hello:
I may be wrong but I think fixed rate debt refers to loans etc i.e. the rate stays the same for the lifetime of the product - you get a loan at 5% and you pay 5% interest until the balance is cleared.
Thanks
Graham0 -
I think Graham is correct. Fixed rate debt & fixed rate bonds are the 2 faces of lending/borrowing money. One you pay it the other you receive it at a fixed rate.
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Most personal/unsecured loans are fixed rate for the duration of the loan.
Most credit cards are variable rate, and the rate will vary along with the Bank of England base rate.0 -
You were probably looking at a site that uses American terms, most unsecured loan borrowing in the UK is at a fixed rate.
Secured loans are usually at a variable rate, so for example the interest rate can go up or down, depending on the markets.
Credit card interest can be at a fixed rate for a period of time also.
Basically secured borrowing is normally at variable rates, whilst unsecured personal loans are at a fixed rate of interest.I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter0
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