How Does Fixed vs Variable Rates Explained | SoFi Work?

A fixed rate is like having the same price for your favorite candy every day, while a variable rate is like paying different prices depending on how much sugar you add to your cereal.

Imagine you're buying ice cream. If it’s a fixed rate, you know exactly how much it will cost each time, no surprises! That’s like a fixed loan rate: the amount you pay each month stays the same, even if things around you change, like the weather or the price of milk.

Now think about your favorite juice box. Sometimes it costs $1, sometimes $2, depending on how many you buy at once. That’s a variable rate! With a variable loan rate, what you pay each month can go up or down based on something else, like the price of bananas or the number of days in the week.

SoFi is like a friendly store that offers both kinds of rates, you pick which one feels most comfortable for your money adventure.