Direct answer: The type of interest that can change over the life of a loan is a variable (or adjustable/floating) interest rate. In contrast, fixed-rate loans keep the interest rate (and often the payment) the same for the term of the loan. Details to help you understand:

• Variable interest rates: These can move up or down over the loan term based on a benchmark (like a published index or policy rate). As a result, your monthly payments can change at scheduled adjustment dates. This is common with adjustable-rate mortgages (ARMs) and some personal or student loans.

• Fixed interest rates: These stay constant for the entire loan term, so monthly payments typically remain the same (though total monthly obligations can still shift if other components change).

Notes for lenders and borrowers:

• When considering a loan with a variable rate, check the frequency of rate adjustments, the index used, caps on how high or how often the rate can change, and any floor (minimum) rate. These features determine how much risk you assume and how predictable payments will be over time.

• Even if a loan is marketed as fixed, some loans have features (like deferred interest or payment options) that can affect total costs over the life of the loan; always review the loan agreement carefully.

If you’d like, I can tailor this to a specific loan type (mortgage, auto loan, student loan) and explain how the rate could change over time for that scenario.