# Changing the interest rate
Source: https://docs.mambu.com/docs/change-interest-rate

You can change the interest rate at account level for the following loan products:

* **Dynamic Term Loans** using the **Declining Balance Equal Installment** interest calculation method with either **Standard** or **Balloon** payment methods and all pre-payment recalculations.
* **Dynamic Term Loans** with a fixed interest rate, using the **Declining Balance** interest calculation method, and **No Recalculation** set as pre-payment recalculation.
* **Revolving Credit Loans** with a fixed interest rate.

:::warning
You may only change interest rates for revolving credit loans when **Interest Rate Source** is set to **Fixed Interest Rate**. When **Interest Rate Source** is set to **Index Interest Rate**, changing the spread on Revolving Credit loans is not currently supported.
:::

The interest rate and the index rate can be changed in the Mambu UI or via the API. For more information on changing rates with the API, see [Change interest rate](/api/api-v2/loans/change-interest-rate) and [Create index rate](/api/api-v2/indexratesources/create-index-rate) in our API Reference.

## Fixed interest rates

Fixed interest rates normally don’t change for the entire term of the loan. However, if you must change them after a period, you have the possibility to do so.

You can increase or decrease the fixed interest rate at the account level for any `Active` or `Active in Arrears` accounts.

To change the fixed interest rate:

1. Open the loan account.
2. On the right-hand side of the screen, select **More** > **Edit Interest Rate**.
3. In the **Editing Interest Rate** dialog, enter a new interest rate and select the date from which you want the interest to change. The date can be in the present, backdated, or in the future.
4. Save your changes.

![Revolving Credit loan, Edit fixed Interest Rate option available under More](@site/static/img/support/edit-interest-rate.png)

![Edit Interest Rate pop-up with New Rate and Value Date (Entry Date) options](@site/static/img/support/editing-interest-rate.png)

You may change the interest rate multiple times. Mambu will always apply the most recent rate. Future changes of interest rates are visible on the effective date. After you change the interest rate, the effect on the schedule will be visible in the **Schedule** tab.

:::note
The **Interest Rate Changed** transaction is a non-financial transaction and cannot be reversed. For this reason, all backdated and current **Interest Rate Changed** transactions will be visible in the **Transactions** tab.
:::

## Index interest rates

*Index interest rates*, also known as variable or adjustable rates, are calculated as the sum of a reference benchmark index interest rate and a specified spread or margin. As a result, index interest rates change when the benchmark index interest rate changes.

You can manually change either one of these components with the following results:

* When you change a **reference index rate**, all loan accounts using this reference are also changed.
* When you change the **spread**, only the specific loan account you are updating will be affected.

To change the interest reference, see [Customizing Index Interest Rates & Tax Rates](/docs/customizing-index-rates).

To change the interest spread:

1. Open the loan account.
2. On the right-hand side of the screen, select **More** > **Edit Interest Spread**.
3. In the **Editing Interest Spread** dialog, enter a new interest spread and select the date from which you want the spread to change. The date can be in the present, backdated or in the future.
4. Save your changes.

![Revolving Credit loan, edit variable interest rate option available under More](@site/static/img/support/edit-interest-spread.png)

:::warning
You cannot change an interest rate to a time before an existing **Repayment** transaction or before an existing **Interest applied** transaction.

To avoid validation conflicts, always ensure that index rate source updates are created before applying any account-level interest spread changes intended for the same value date.
:::

## Adjustable interest rates
On the same loan account, you can have both interest rate sources and to switch from fixed interest rate to index interest rate and the other way around throughout the life cycle of the loan. You can set as many interest rate sources as you wish, which offers flexibility.