Fixed Or Variable Rate, Which Is Better?

SUMMARY

In this video, Dave gets a call from Jess in Springfield, Massachusetts. She asks, “Should I consolidate my loans, and should I get a variable interest rate or a fixed interest rate?”

Dave starts by stating you can’t consolidate government and private loans. You can consolidate two government loans, but the only reason to do that would be if you were going to get a lower interest rate.

Dave gives this example: say you had two individual loans that total $9,500 with the same interest rate and same monthly payment. You would pay them off at the exact same time as two consolidated loans with the same total value and interest rate. That’s why it’s so important to only consolidate your loans if you’ll save money on interest in the process.

Once you’re considering a fixed-rate vs. variable-rate mortgage, Dave says you should never get a variable interest rate. A fixed interest rate will always be more beneficial in the long run.

Most importantly, Dave reminds Jess that she is the “secret sauce” here. Her determination to save money and get out of debt will be what helps her win. Cut out extra spending in other areas of your budget and you’ll start to see change!

RESOURCES

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[davester]

Never, ever, ever do variable interest rates. Always do fixed. The problem with variable interest rates is if interest rates go up, then so will your payments. Of course they could also go down. Err on the side of caution and do fixed. At least you always know how much your minimum monthly payments are going to be.

[raulgolfs]

Fixed rate definitely worth it long term.

[RJM]

Did Dave Ramsey just say get "turnt up? "🤸 Lol

[quinnmoore]

I'm 24 just bought a house, and got 4.125% fixed rate loan on 98, 000. Is that a good rate? My payment is 685 but I pay 800

[acebragg]

She sounded like she still didn't understand.

[stephanfiebich]

i have had no open accounts for 2 years and my credit score is still there and much lower. my wife still has open accounts and refuses to get rid of her credit cards. how do i get my score to 0