A type of loan that features steady interest rates for the duration of the loan is called a "fixed-rate loan."
In a fixed-rate loan, the interest rate remains constant (fixed) throughout the entire term of the loan. This means that the borrower's monthly payments remain the same, making budgeting and financial planning more predictable and manageable.
Fixed-rate loans are commonly used for various types of loans, including mortgages, personal loans, auto loans, and student loans. They provide borrowers with stability and protection against fluctuations in interest rates, which can help them avoid unexpected increases in monthly payments over time.
In contrast, variable-rate loans (or adjustable-rate loans) have interest rates that can fluctuate periodically, usually in response to changes in market interest rates. This can result in changes to the borrower's monthly payments, making them less predictable and potentially leading to higher payments in the future.
Overall, fixed-rate loans are popular among borrowers who prefer the stability and certainty of knowing that their interest rates and monthly payments will remain unchanged throughout the life of the loan.