Which of the following describes a loan type where the interest rate is set at an established level and does not change over the term of the loan?

A fixed-rate loan is characterized by an interest rate that remains constant throughout the entire term of the loan. This stability allows borrowers to predict their payment amounts over time, as the interest does not fluctuate with market changes. Fixed-rate loans are commonly used for mortgages and other long-term financing needs, providing reliability for budgeting and financial planning.

In contrast, variable rate loans have interest rates that can change based on market conditions, which can lead to fluctuating payment amounts throughout the term of the loan. Tax-exempt loans refer to financial instruments that do not incur taxation, usually related to municipal bonds, and do not describe interest rate characteristics. Equity participation involves an investment strategy where a lender receives a portion of the equity in the financed asset, again not related to stable interest rates. These distinctions highlight why the fixed-rate option best fits the description of the question.