Let me share with you RLLR full form. The full form of RLLR is a repo-linked lending rate. This rate is linked to RBI’s repo rate. But the interest rate of RLLR depends on various factors. For example, the RLLR home loan interest rate will be based on various factors like what is the loan amount, the loan value of the loan, the risk of the borrower, etc. The bank might even charge a Spread or Margin fee. The bank can even have an RLLR of 6.5% but the actual home loan interest rate can be 7.5% of which 1 per cent will be the Spread or Margin of the bank. Banks can decide on the fee to fix the Margin while offering loans to the borrowers. This is the RLLR meaning.
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Now that we know what is RLLR, let us understand how RLLR work.
When banks borrow funds from the RBI it is known as the repo rate. When RBI provides lower repo rates banks lend at a lower rate. So, in the case of lending based on RLLR, the home loan interest rate will move up or down based on the repo rate. Let me share an example with you. Let’s say RBI’s repo rate is 5.35 per cent and is cut by 35 basis points and it is being settled at 5% the RLLR having a repo rate as an external benchmark will also drop by 35 basis points.
This was the gist about RLLR and RLLR full form.
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What is RLLR?
Vishakha
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2 Year
2022-09-30T10:29:11+00:00 2022-09-30T10:29:18+00:00Comment
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