Fixed interest rate loan is one in which the rate of interest remains fixed from funding till the loan's entire term. Hence, the loan payment amount does not change with fluctuations in index rate or market rates.

In Oracle Financial Services Lending and Leasing, fixed interest rate loans can be defined in the following way:

• Create a FLAT RATE Index Type record in Index Rates screen (Setup > Products > Index Rates) with Rate=0.00

  Figure D-2 Index Rates

  
  

  
  Description of "Figure D-2 Index Rates"

  
  
• Select this Index Type record during Origination/Servicing for Fixed Rate loans.

Since the index rate is always zero for this Index Type, the loan interest rate will always be the Margin rate (i.e. contract rate) which does not change during life of the loan.