Floating interest refers to the interest rates that fluctuate based on market conditions. In finance, the term floating interest is also known as variable interest. Other synonyms for the term floating interest include adjustable-rate, flexible-rate, and variable-rate. These terms are commonly used in financial documents and agreements to describe the loan or credit agreements where the rate of interest may change periodically. The main benefit of floating interest is that it can provide borrowers with lower rates during times of low market interest rates. However, borrowers should be aware that interest rates may also rise when the market conditions change, leading to higher payments.