A fixed interest rate on a loan stays exactly the same for the entire loan tenure, or for a specific pre-agreed period, regardless of what happens to market interest rates or the RBI's repo rate during that time. This means your EMI amount remains completely predictable and unchanging for that entire duration, making budgeting simple and removing any surprises.
The trade-off for this certainty is that fixed rates are usually set somewhat higher than the prevailing floating rate at the time you take the loan, since the lender is taking on the risk that market rates might rise later. Fixed rates are more common for personal loans, car loans, and shorter-tenure loans, while home loans, being much longer in duration, are predominantly offered on a floating-rate basis in India, with fixed-rate home loans being comparatively rare and often more expensive.