A fixed rate stays the same for the loan tenure (or a defined period), giving predictable EMIs. A floating rate moves with the lender’s benchmark rate, so your EMI can rise or fall over time.
Floating rates are usually lower to start with and tend to work out cheaper over a long tenure, since they track the broader interest rate cycle rather than locking in today’s rate for years.
Fixed rates suit borrowers who value predictability — especially over shorter tenures, where rate-cycle swings matter less — while floating rates suit those comfortable with some variability in exchange for a lower long-run cost.
