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Variable Interest Rate Loan Question
Posted on 11/11/14 at 4:24 pm
Posted on 11/11/14 at 4:24 pm
Have a 10-year variable rate loan tied to monthly LIBOR, which went up from 0.15 to 0.16 this month and is noted on my account.
Since the term is fixed, I assumed the payment amount would increase to account for the additional interest; however, the payment amount remained the same and more of the payment was applied to interest vs. principal.
Can someone explain how this is going to work if I'm on a 10 year term?
Since the term is fixed, I assumed the payment amount would increase to account for the additional interest; however, the payment amount remained the same and more of the payment was applied to interest vs. principal.
Can someone explain how this is going to work if I'm on a 10 year term?
1
Posted on 11/11/14 at 5:21 pm to Golfer
I have a variable but the first 10 years is interest only. Is your principle due to be paid off at the end of the 10 years? That would be the only logical reason.
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