प्राईम लेंडिंग दर (PLR): तुमच्या लोनवर अर्थ, महत्त्व आणि परिणाम

लोन घेताना सर्वात मोठ्या आव्हानांपैकी एक म्हणजे लोन देणाऱ्या संस्थांद्वारे आकारले जाणारे उच्च व्याजदर. हे व्याजदर तुम्हाला भरावयाचे पैसे लक्षणीयरित्या वाढवू शकतात आणि तुमच्या फायनान्सवर दुर्दैवी परिणाम करू शकतात.

However, if lenders view you as a trustworthy client with a high credit score and good financial profile, you can avail the loan at a better interest rate, known as the prime lending rate.

This article explores the prime lending rate’s meaning, the factors affecting it, and how it can affect the loans you borrow.

प्राईम लेंडिंग दर म्हणजे काय?

The Prime Lending Rate (PLR) is the interest rate lending institutions use as a base to determine the interest rate for their loan products.

You can define the prime interest rate as the lowest rate at which financial institutions lend money. It is used as a reference point to set interest rates for various variable-rate financial products such as mortgages and personal loans.

Changes in key policy rates by the Reserve Bank of India (RBI) influence the prime lending rate.

Commercial financial institutions offer prime lending rates to their most creditworthy consumers on short-term loan products, including variable-rate personal and business loans.

Consumers who benefit from the prime lending interest rate include people who have:

1. High credit score,
2. Strong financial profile, and
3. Low default risk

Conversely, consumers with a low credit score or a higher perceived risk may be charged a higher interest rate by lenders.

Key factors affecting the prime lending rate in India

Prime lending rates in India are set according to the RBI guidelines. The RBI sets the base rate below which no lending institution can set its prime rate. The prime rate for a particular financial institution is set by its management according to various factors such as funding costs and operating expenses.

Various other factors, such as market conditions, inflation rates, global economic conditions, and currency exchange rates, can also impact the prime lending rate in India.

All these factors, in combination, determine the spread, which is the additional cost lenders consider beyond the Repo Rate. The prime lending rate added to the spread determines the interest rate for consumers.

Which loans are not linked to the PLR rate?

Changes in the prime rate do not affect existing loans or lines of credit with fixed interest rates. This includes loans like student loans and mortgages, as well as credit cards issued with fixed rates.

Impact of PLR rate on personal loans & home loans

The prime lending interest rate serves as a benchmark for lending rates, and it may affect personal loan interest rates. An increase in the prime lending rate may also increase personal loan interest rates, increasing the loan repayment amount.

Changes in the prime lending rate can thus affect the affordability and cost of borrowing these loans.

Differences between the prime lending rate and the base rate

The base rate, introduced in July 2010, is the minimum interest rate set by the RBI for giving out loans. RBI controls the base rate to enhance transparency, keep the economy in check, and ensure that consumers are not charged discriminately.

The following table illustrates the differences between the prime lending rate and the base rate:

How often does the PLR rate change in India?

In India, the PLR rate does not change on fixed dates. Banks update their PLR after reviewing market conditions, changes in funding costs, and the RBI’s policy. When interest rates in the economy rise or fall, banks may revise their PLR accordingly. Usually, these changes occur a few times a year, but there is no schedule. If inflation increases or the RBI changes its policy rates, banks may adjust the PLR to protect their margins.

Today, many new loans are linked to MCLR or external benchmarks. Thus, the impact of PLR rate changes is on older loans and some specific lending products.

PLR rate vs Repo-linked rate vs MCLR: Which is best for your loan?

Before taking a loan in India, it is vital to understand the differences between the PLR rate, Repo-linked rate, and MCLR. Each one affects your interest cost differently.

• The Prime Lending Rate (PLR) is an older benchmark. It is set by banks and usually applies to old loans. The PLR rate does not change quickly when the RBI cuts or raises rates. As a result, borrowers may not enjoy instant benefits.
• The Marginal Cost of Funds-based Lending Rate (MCLR) is more transparent than PLR. It is linked to a bank’s cost of funds and is revised periodically, every six months or 1-year. Rate changes affect borrowers more quickly than PLR, but still with some delay.
• The Repo-linked rate is directly linked to the RBI’s repo rate. When the RBI changes the repo rate, your loan interest changes quickly. This makes it the most transparent and borrower-friendly option.

When it comes to understanding which loan is best for you, repo-linked ones can be a good choice. They offer faster benefits during rate cuts. MCLR is the next best option, while PLR is suitable only for older loans.

Tips to get loan offers below the PLR rate in India

The following simple tips can help to get loan offers below the PLR rate in India:

1. Maintain a high credit score: A score above 750 shows good repayment history and lowers lender risk.
2. Show stable income: If you have a regular income and a long job history, it improves trust with banks.
3. Compare lenders: Different banks and NBFCs offer different rates. So, you must always compare.
4. Choose secured loans: Home or car loans usually have lower rates than personal loans.
5. Negotiate with your bank: Better rates are offered to existing customers with good records.
6. Opt for shorter tenure: The interest rates for shorter loan periods are often lower.

निष्कर्ष

Understanding the meaning of the prime interest rate can help you gain an edge in securing loans. With a good credit score and financial profile, you can get loans at better interest rates than the general populace and fulfill your financial dreams, like buying a new bike.

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