When getting a loan it is always best to try to get one with fixed interest rates. Not only do they tend to be lower at the outset you know what you are going to be paying throughout the life of the loan. For instance, if the fixed interest rate is 8% when you get a 5 year loan, it will still be at 8% when the last payment is due. And the fixed interest is on any unpaid balance, which means the payments should get lower over time as the principal is paid down – unless an amortization table accounts for that and spreads the interest out over the life of the loan.
Oftentimes people would like to know exactly who determines interest rates. Actually, interest rates are driven by the Fed Funds rate but are actually charged by the lending banks. They move in tandem most of the time on fixed interest loans and this is most readily apparent in mortgage loans which are roughly driven by Treasury Notes. This sounds more confusing than it is. The long story is that no one knows when or how much rates will change over time, while the short story is that interest rates change in accordance with rate established by the federal government even though they don’t directly govern loan rates.