2 min read
Definition
An interest rate swap is a derivative where you agree to pay a fixed rate and receive a variable rate (or vice versa) on a notional amount, effectively converting a variable loan into a fixed cost without changing the loan itself. It suits larger facilities and carries its own breakage costs if unwound early.
In plain terms
It is a way to fix your rate through a side contract rather than by re-papering the loan — powerful, but complex and best taken with advice.
Why it matters for your company
Swaps suit large, long facilities and need care — take advice before using one. See hedging a variable loan and breakage cost.
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Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.