Credit gives the word to pay either by repaying it or returning those resources later. In other words, this credit is the method of making the reciprocity formal, legally enforceable, and of course, extensible to a vast group of people who are not related.
However, the resources provided may be financial or have goods or services, like consumer credit. The credit covers any form of deferred payment. Credit generally gets extended by the creditor, the debtor or lender, and sometimes the borrower.
The fixed interest rate remains unchanged and the same for the entire term of the liability or debt. For instance, a mortgage/home loan of a specific duration will have fixed interest rates all throughout. The monthly calculation of payments is based on the rate of interest, and hence fixing the rate leads to the same proportion of principal and interest portion deductions every month. The monthly EMI also remains unchanged as a result. Loans usually have fixed and floating rates of interest. Some loans may have a combination of fixed and floating rates as well. The calculation of fixed interest costs needs parameters like the rate of interest, loan amount, and the repayment tenure for the loan.
Fixed rate home loans or mortgages are readily available throughout several global markets and regions. These loans are often preferred by several home loan consumers, especially those who seek fixed EMIs payable every month. However, the fixed interest rate loan may be slightly costlier than a floating interest rate loan, although the latter is subject to rate increases with changing market conditions in the future.
