variable interest rate

variable interest rate definition - business

variable interest rate

An interest rate on a loan that adjusts at regular intervals based on a specified index. For example, a loan may have a rate that adjusts each six months to 1% above the prime rate. A loan with a variable interest rate tends to entail greater risk for the borrower.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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