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What is the definition of a Variable Rate Loan? Variable rate loans are loans that have an interest rate that will fluctuate over time in line with prevailing interest rates. They generally have lower starting interest rates than fixed rate loans, but the interest rate and payment amounts can change over time. Sometimes they are also known as floating rate loans.
A cost that changes in proportion to a change in a company's activity or business. Investopedia explains Variable Cost. A good example of a variable cost is fuel for an airline. This cost changes with the number of flights and how long the trips are.