Fixed Rate Loan

Posted in Finance, Accounting and Economics Terms, Total Reads: 1214
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Definition: Fixed Rate Loan

Fixed rate loans are those loans which are issued at a fixed rate of interest. This rate of interest does not change during the period of the loan, till the maturity date. Hence the coupon payments on the bonds remain constant.

These bonds can be contrasted with floating rate bonds where the interest rates and coupon payments are adjusted according to the inflation, an index etc.

 

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