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Base rate v/s plr

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Base rate v/s plr

Last updated: August 11 2010
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  • Base rate v/s plr

    HI

    BOB has increased the PLR by 50 bp to 12.5%, however it has still not increased the base rate which is at 8%.
    Since all the old customers are linked to PLR , emi would be more for them ...
    Since I have not yet disbursed the loan , should I change it to Base rate instead of PLR ...
    I might have to pay the processing charges again ...
    which would be around 12K ... (last time processing was free of cost)

    Comments are welcome ...
  • #2

    #2

    Re : Base rate v/s plr

    Originally posted by nibha View Post
    HI

    BOB has increased the PLR by 50 bp to 12.5%, however it has still not increased the base rate which is at 8%.
    Since all the old customers are linked to PLR , emi would be more for them ...
    Since I have not yet disbursed the loan , should I change it to Base rate instead of PLR ...
    I might have to pay the processing charges again ...
    which would be around 12K ... (last time processing was free of cost)

    Comments are welcome ...
    Hi,
    Are you sure that bank is demanding re-payment of processing fee for the shift from BPLR to base rate?

    I ve heard that banks are providing "One Time" shift at very nominal charges.

    Anyways, Base rate may not turn out to be more beneficial than the BPLR for an individual Home Loan, as this is the rate below which the bank can't lend. Bank can always add premium to this rate and this premium can differ for one person to another.

    Banks can still play their games, even under Base rate system

    Comment

    • #3

      #3

      Re : Base rate v/s plr

      I have not checked about the fee ...
      Actually the funda is PLR will apply to the old customers who are already trapped ... so they can easily increase it ...
      New customers would be taken based on the base rate ...
      Before the hike in PLR the effective interest was same in both the cases PLR and BASE
      it was 3.5 % below PLR and 0.5% above BASE RATE
      PLR was 12% and Base Rate 8% . so the ROI was 8.5 %
      Now they have increased the PLR to 12.5% so the ROI under PLR moves to 9% while under the base rate its still the same 8.5 %
      In case if they increase the Base rate in sync with PLR then their will not be any discrepancy , otherwise old customers will suffer ... as it always happen ...





      Originally posted by player View Post
      Hi,
      Are you sure that bank is demanding re-payment of processing fee for the shift from BPLR to base rate?

      I ve heard that banks are providing "One Time" shift at very nominal charges.

      Anyways, Base rate may not turn out to be more beneficial than the BPLR for an individual Home Loan, as this is the rate below which the bank can't lend. Bank can always add premium to this rate and this premium can differ for one person to another.

      Banks can still play their games, even under Base rate system

      Comment

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