Here’s the difference between student loans with “fixed” vs. “variable” rates:

A loan with a fixed interest rate means you’re locked into that rate for the life of your loan. Having fixed rate loans can help you predict how much you’ll pay in interest and keep your interest payments at manageable levels.

Fixed rates tend to be higher than introductory variable rates — but they’ll never change, so you know what you’re in for.

Variable student loan rates are just that — variable. They can change at any time. These rates tend to be related to the current Fed and LIBOR rates, which serve as benchmarks for many types of interest rates on loans, from mortgages to credit cards — and yes, student loans.

Interest rates have been at historic lows in recent years, allowing borrowers to enjoy relatively cheap debt (the lowest rates are reserved for those with excellent credit scores). For example, student loan refinancing candidates with good credit could potentially score a variable rate below 3.00%.

However, interest rates can rise. When this happens, a low-interest loan could jump to a higher rate and affect your monthly payments.