Personal Loans Usually Have Fixed Interest Rates

The interest rate on a personal loan is usually locked. It doesn't change for the life of the loan. But some personal loans come with a variable interest rate that changes periodically. The drawback of a variable interest rate is that your payments can fluctuate as your rate changes, making it harder to budget for your loan payments.

Interest rates on loans are based on your credit score. Generally, the better your credit score, the lower your interest rate. Lower interest rates are obviously ideal because this translates to paying less in exchange for borrowing the loan.