loan carrying an interest rate that may move up or down, depending on the movements of an outside standard such as the rate paid on U.S. Treasury securities; also called an adjustable rate loan. The lender can increase or decrease the interest rate on this type of loan at specified intervals to keep pace with changing market conditions. The frequency of the interest rate changes and the limit, if any, on the amount of change is set by the lender and must be specified in the loan document.