Variable Rate Loan
/ˈvɛəriəbəl reɪt loʊn/
Definitions
- (n.) A loan with an interest rate that fluctuates over time based on a benchmark or index rate.
The borrower preferred a variable rate loan to take advantage of potential interest rate decreases.
Forms
- variable rate loan
- variable rate loans
Related terms
See also
Commentary
Variable rate loans require careful drafting to specify the benchmark rate and adjustment intervals clearly to avoid disputes over interest calculations.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.