What is baserate method and what are the benefits from changing into baserates? | Which people are benefitted by changing into baserates?

September 24th, 2010| Uncategorized.

What is baserate method and what are the benefits from changing into baserates? | Which people are benefitted by changing into baserates?

There will be change in the interest rates if the baserates are changed and they won’t affect the EMI. Those who take loans should compare and the loan from the bank which gives low interest rates. If the interest rates will reduce in the future, the banks should give these interest rates as its duty. If the reserve bank increases the repo or reverse repo, the interest rates will increase. The banks should tell the base rates and they can decide the interest rates based on the customers profile and the duration to pay the money back.

Change from BPLR to baserate:

The RBI had provided the opportunity to change from BPLR to baserates for the customers who take the loans. There is no need to pay extra amount to change to baserate. There are two ways which are PLR and baserates. The PLR is for the old customers and the baserate is for the new customers. The banks are encouraging the customers to change into baserates. The banks should check the interest rates every three months. This facility is not available in BPLR method and they should pay the interest rates accordingly even though the rates are decreased. We should consider few points when we want to change from BPLR to baserate. The interest rates are low at this moment and the interest rates may increase in the future. So there is no benefit in changing into baserates when the duration of the loan is less. It is better to be in the same plan if the people had selected the fixed interest rate plans. Those who took the housing loan on floating rate in the last two years can change into baserate. The people who took the loan on more interest rates than the present interest rate can take the baserates. Even after changing, if the interest rates are more than the market rates, then they should bargain and change the conditions of the loan. There is chance of charges on the outstanding loans by the banks. So we should select the better option.

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