The BLR meaning involves the Base Lending Rate, which is the interest rate that the bank sets based only on the rates at which different interest rates are quoted in relation to risk exposure.
No interest will often be charged on credit below this rate, with the exception of loan accounts for government-sponsored programmes.
What is the full form of BLR?
As I mentioned above, the full form of BLR is Bank Loan Rating.
What is BLR in Banking?The best rate a bank can offer for lending money is called BLR, or Prime Lending Rate. Depending on the risk, the bank will grant loans based on this PLR.
Calculate your EMI on a home loan via the NoBroker EMI calculatorLet's say a bank's PLR is 12%. The lending rate will then be 14%, with a loan represented as something like +2% above PLR. Therefore, if PLR decreases to, let's say, 10%, the interest on that loan will decrease by 2% to become 12%.
This rate is typically used as a benchmark for determining the interest rates on other types of loans, such as personal loans or mortgages.
I hope this helps!
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If you want to avail a home loan, you need to repay the money with interest. Now, you may wonder how banks set these interest rates. That's where BLR comes in. The BLR full form is Base Lending Rate. I will try to explain the meaning in simple terms.
Get home loans from your preferred banks at the lowest interest rate at NoBroker!What is BLR?
In simple terms, BLR is known as the base rate that is internally set by the bank to decide how much to charge a buyer while they opt for a home loan. The rate is usually determined by the Overnight Policy Rate (OPR). OPR is the interest rate at which banks lend money to each other. So, just to remind you, the Reserve Bank of India lends money to banks such as State Bank of India, or Punjab National Bank (PNB).
In India there are four components that determine the base rate. Those components are:
Cost of funds i.e. interest rate provided by the bank on deposits
Operating costs
The minimum rate of returns
Cost of the Cash Reserve Ratio
Changes in the OPR affect the rate.
So, if we think about it, Base Rate in India is set by RBI and below this interest rate banks cannot lend money to their customers.
While you opt for a home loan the banks always give you a quote of BLR interest rate, plus or minus the percentage.
This is all about BLR full form. I hope you get the idea now.
Read more:
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What is BLR?
Sandesh
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2022-05-23T09:52:19+00:00 2023-09-29T17:43:38+00:00Comment
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