Most personal loans are offered at a fixed rate. You may see an option for a variable interest rate. Which is best depends on your needs and ability to plan. A fixed-rate loan has the advantage of transparency. The interest rate and instalment payment terms are known when you sign. If interest rates increase, your instalments are fixed at a lower rate. On the other hand, if interest rates go down, your instalments are locked in at that higher rate. You may pay a higher overall rate for this stability.  A variable rate loan fluctuates based on market conditions and the prime rate, the typical interest rate banks charge borrowers with good credit. At the time This means that your rates may go down or up over time with market conditions. Variable-rate loans usually start a little lower than fixed-rate loans, but you do not have a guarantee that your monthly payment will remain the same. Good to know From 2010 through 2022 the prime rate in Canada has ranged from between 2.45% to 3.95%. Variable interest rates are based on this number.