Fixed rate
Your interest rate stays the same for an agreed period (sometimes the full tenure, sometimes a fixed initial period after which it may convert to floating, depending on the product). Your EMI doesn’t change regardless of what happens to broader interest rates in the market. Lenders typically price this certainty into the rate itself - fixed rates are often somewhat higher than floating rates at the time you take the loan, since the lender is also taking on the risk that rates might rise later.
Floating rate
Your interest rate moves over time, tied to a benchmark the lender uses for pricing. When that benchmark moves, your rate - and your EMI or tenure - moves with it, in either direction. Floating rates have historically tended to work out cheaper over a full loan tenure in many cases, but that’s a historical pattern, not a guarantee; a genuine and sustained rise in rates would mean a floating-rate borrower pays more over time than a fixed-rate borrower who locked in earlier.
Which one actually fits
Fixed tends to suit someone who specifically values knowing their exact EMI for budgeting purposes, or who expects rates to rise during their loan tenure. Floating tends to suit someone comfortable with some payment variability, particularly if they expect rates to hold steady or fall, or if the loan tenure is short enough that the risk of adverse rate movement is more limited.
Some lenders offer a hybrid structure - fixed for an initial period, floating afterward - as a middle ground between the two.