Tag Archives: floating interest rate

Demystifying the New Method to Calculate Lending Rates

If you’ve kept up with the news, you might have heard that the Reserve Bank of India has introduced a new method of calculating bank lending rates. It’s called the Marginal Cost of Funds based Lending Rate. The new calculation method will replace the base rate system to make deciding the lending rates for loans much easier. Let’s tell you all about the new method.

Floating interest rates and BPLR

This interest range for the bank to choose from is termed a spread. This spread is left to the discretion of the bank and depends on the other factors involved in loan eligibility like the credit profile of the loan consumer for instance. According to RBI regulations, banks are required to make changes in existing… Read More »