Floating Rate Loans

Reserve Bank of India (RBI) has announced a transparent framework will be introduced to reset interest rates on floating-interest loans such as home loans.

The Reserve Bank today said it will come out with a framework allowing borrowers to switch to fixed interest rate from floating interest rate, a move that would provide relief to borrowers of home, auto and other loans reeling under the impact of high interest rate.

Repo rate is the key interest rate at which the RBI lends short-term funds to commercial banks.

State Bank of India (SBI), the country's largest bank, recently said that it would adopt the repo rate as external benchmark for all its floating rate-based loans from October 1. The change will impact floating rate loans for small businesses, home and retail loans, the bank said in a statement. Repo rate is the interest rate at which the Reserve B...

SBI floating rates: State Bank of India (SBI) said the change will impact floating rate loans for small businesses, home and retail loans. SBI also said it voluntarily extended the external benchmark-based lending to medium enterprises, in order to boost lending to the MSME (Ministry of Micro, Small and Medium Enterprises) sector.

The central bank has allowed the banks to choose one of the several benchmarks such as the RBI's policy repo rate.

The RBI said lenders would now have to link all new floating rate personal or retail loans and floating rate loans to MSMEs to an external benchmark.

In case of both women and salaried borrowers for floating rates, the Chanda Kochhar-led bank has increased its spreads or mark-up over base rate paid by a borrower by 0.10 per cent.

Till about a couple of years back, one had reason to be worried about the prepayment of one's home loan because of the costs involved. But that does not hold true any longer, with the RBI having directed banks and financial institutions to do away with any penalties on floating rate home loans.

The level of issuances from banks, Icra said, will be dictated by their ability to raise floating rate bonds as home loans are typically floating rate in nature which helps them manage interest rate risk and also find investors for the large issuances.

Providing relief to borrowers, Reserve Bank on Wednesday today directed banks not to levy any penalty on individual borrowers for pre-paying floating loans.

The Reserve Bank of India (RBI) on Wednesday barred banks from levying foreclosure charges or pre-payment penalties on individual borrowers for all floating rate loans with immediate effect.

The bank also effected a similar hike in its prime lending rate, which is applicable to existing customers on floating rates, ICICI Bank said in a statement.

If certainty and security are prime considerations, a fixed rate home loan will be the best. However, it won't come without the premium on interest rates.

The optimal choice will be the one that lets you pay a lower EMI for a mid-term tenure.

Reserve Bank of India (RBI) has announced a transparent framework will be introduced to reset interest rates on floating-interest loans such as home loans.

The Reserve Bank today said it will come out with a framework allowing borrowers to switch to fixed interest rate from floating interest rate, a move that would provide relief to borrowers of home, auto and other loans reeling under the impact of high interest rate.

Repo rate is the key interest rate at which the RBI lends short-term funds to commercial banks.

State Bank of India (SBI), the country's largest bank, recently said that it would adopt the repo rate as external benchmark for all its floating rate-based loans from October 1. The change will impact floating rate loans for small businesses, home and retail loans, the bank said in a statement. Repo rate is the interest rate at which the Reserve B...

SBI floating rates: State Bank of India (SBI) said the change will impact floating rate loans for small businesses, home and retail loans. SBI also said it voluntarily extended the external benchmark-based lending to medium enterprises, in order to boost lending to the MSME (Ministry of Micro, Small and Medium Enterprises) sector.

The central bank has allowed the banks to choose one of the several benchmarks such as the RBI's policy repo rate.

The RBI said lenders would now have to link all new floating rate personal or retail loans and floating rate loans to MSMEs to an external benchmark.

In case of both women and salaried borrowers for floating rates, the Chanda Kochhar-led bank has increased its spreads or mark-up over base rate paid by a borrower by 0.10 per cent.

Till about a couple of years back, one had reason to be worried about the prepayment of one's home loan because of the costs involved. But that does not hold true any longer, with the RBI having directed banks and financial institutions to do away with any penalties on floating rate home loans.

The level of issuances from banks, Icra said, will be dictated by their ability to raise floating rate bonds as home loans are typically floating rate in nature which helps them manage interest rate risk and also find investors for the large issuances.

Providing relief to borrowers, Reserve Bank on Wednesday today directed banks not to levy any penalty on individual borrowers for pre-paying floating loans.

The Reserve Bank of India (RBI) on Wednesday barred banks from levying foreclosure charges or pre-payment penalties on individual borrowers for all floating rate loans with immediate effect.

The bank also effected a similar hike in its prime lending rate, which is applicable to existing customers on floating rates, ICICI Bank said in a statement.

If certainty and security are prime considerations, a fixed rate home loan will be the best. However, it won't come without the premium on interest rates.

The optimal choice will be the one that lets you pay a lower EMI for a mid-term tenure.