Home → Glossary
Glossary term

Variable Interest Rate

Definition

A variable interest rate can go up or down over time, which means your payment can change too.

Technical definition

A variable interest rate adjusts periodically based on a referenced benchmark or index, causing payments to fluctuate over the loan term.

Why it matters

Variable rates may start lower but carry the risk of rising. Whether they fit depends on your tolerance for payment changes.

Example

If the benchmark a variable-rate loan follows rises, the payment can increase at the next adjustment.

Looking for help exploring agricultural financing options? AgLoans.com helps borrowers connect with agricultural financing resources and lending partners that may fit their situation.

Visit AgLoans.com