What is Floating Rate of Interest? And Floating Rate of Interest Effect your EMI for Citi Bank Student Loan?

What is Floating Rate of Interest? And Floating Rate of Interest Effect your EMI for Citi Bank Student Loan?

  • Interest Rate does not change as per the market fluctuations
  • Having a fixed interest rate brings a sense of safety and security for the borrower
  • Since it entails a fixed monthly repayment schedule, it helps in easy budgeting

Drawbacks of Fixed Interest Rate:

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  • Generally, Fixed Interest Rates are 1%-2.5% higher than Floating Interest Rate
  • Fixed Interest Rates are subject to change as per the market fluctuations, hence if by chance the interest rate decreases, the fixed rate Citi Bank Student Loan won’t be benefited as the borrower will have to pay the same fixed amount every month.

Floating rate of interest changes depending on the market-lending rate. It is also known as variable rate of interest. If the lending rate increases, the floating interest rate will also increase. Due to the risk of fluctuation, the floating rate of interest is usually lower than the fixed rate of interest. With a floating rate of interest for a specified loan tenure, you can either expect your EMI to reduce or increase depending on the rise in the interest rate.

The online loan EMI calculator for Citi Bank Student Loan can be used to calculate loan EMIs with a Floating rate of interest.

Floating Interest Rate is the rate which changes as per the market conditions.

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