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The Benchmark Prime Lending Rate (BPLR) is a base rate that is generally offered only to the best customers and is used for setting the interest rate for student loans (amongst other loans).
The interest rate is typically equal to the BPLR plus some additional amount that helps balance the risk of the customer with the return enjoyed by the bank.
For example, the BPLR may be 2.5%, however, the interest rate may be 3.25% on a loan because there is a perceived higher risk with the quality of the loan.
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Benchmark Prime Lending Rate meaning?
According to the Reserve Bank of India (RBI), banks are free to fix the Benchmark Prime Lending Rate (BPLR) with the approval of their respective Boards. Banks are free to decide the BPLR but their interest rates have to have a reference to the BPLR fixed. The BPLR is the interest rate that commercial banks charge their most credit-worthy customers.
What is the difference between BPLR and base rate system?
Banks gave loans at even lower than BPLR to blue chip companies while charged higher rate of interest from common people. This is why RBI has decided to scrape the BPLR system and introduced a Base Rate that will be applicable from July 1, 2011. Base rate will bring transparency in the loan segment as banks cannot give loans at rates lower than Base Rate.
What is BPLR and how it works?
BPLR refers to Benchmark Prime Lending Rate. This is the rate at which most banks grant loans to their most creditworthy trustworthy customers.
What do BPLR mean?
Benchmark Prime Lending Rate
What is BPLR?
What is BPLR ,Benchmark Prime Lending Rate?The BPLR is the interest rate that commercial banks charge their most credit-worthy customers.According to the Reserve Bank of India banks are free to fix the Benchmark Prime Lending Rate (BPLR) with the approval of their respective Boards. Banks are free to decide the BPLR but their interest rates have to have a reference to the BPLR fixed.About the author:The author Subhrajeet Talukdar founded Apex Finance & Marketing in April 2006 in Mumbai and has launched Eazeeloans.com a loan advisory portal that offers the best loan deals for Personal Loans, Home Loans, Property Loans, Auto Loans, Business loans, Unsecured loans, Unsecured Finance in Mumbai.They have their offices at :B 7/8,Sai Prasad CHS,N C Phadke Marg,Andheri,Mumbai-400069.Maharashtra.India.E Mail:info@eazeeloans.comWebsite: www.eazeeloans.com
What is bplr in banking?
BPLR is the reference rate for banks for pricing their loan products. It is calculated taking into account the cost of funds, operational expenses, and the minimum margin to cover regulatory requirements of provisioning and capital and profit margin. Banks are supposed to lend to their prime customers at BPLR and increase the rate with risk premium in case of sub-prime customers and tenor premium wherever applicable.
How does the real interest rate relate to the nominal interest rate?
A real interest rate and a nominal interest rate are quite similar. The only real difference between the two interest rates are that a nominal interest rate include the cost of inflation where as the real interest rate does not.
What is the difference between the coupon rate and the interest rate?
Coupon rate is something that is paid semiannually. The interest rate is something that starts as soon as a bond is issued.
What is the relationship between interest rate and discount rate?
When interest rates increases currency value appreciates while when interest rate decreases so the currency rates depreciates
What was the interest rate in the US in 1975?
The interest rate in 1975 was between 7.0 per cent and 10.0 per cent. The highest interest rate was from January and February of that year.
What is the difference between flat rate and reducible interest?
Reducible interest means that one only pays interest on the balance of money owing at the end of the month. Flat rate means that interest is calculated on the original load. Reducible interest rate is approx. equal to twice the flat interest rate.
What is the current interest rate for auto finance?
Auto finance interest rates vary, but the current interest rate is generally between six and nine percent.
