Variable interest rate loans offer flexibility by adjusting the interest rate based on market fluctuations. This means that your monthly loan repayments can vary, potentially decreasing if interest rates fall or increasing if they rise. Many variable rate loans include features aimed at reducing overall interest costs. For instance, loans with a 100% offset arrangement connect your loan and savings accounts, reducing interest by offsetting funds in your savings against your loan balance. Additionally, variable rate loans often allow for increased payments, enabling faster loan repayment when extra funds are available.