2. Fixed Interest Rate Loan

The main feature of this loan is that you can lock your interest rate in, for a predetermined term, generally 1, 2, 3, 4, 5, 7 or 10 years. The advantage of this loan is that it allows you to budget your loan repayments, knowing that your monthly, fortnightly or weekly repayments will remain the same and will not be affected by changes from the Reserve Bank or lender. The disadvantage to this loan is that there can be penalties for extra repayments and early payout.