Home Loan Switch from PLR to Base rate

POSTED BY sachin.shewale ON March 31, 2012 12:49 pm COMMENTS (2)

SBI have launched new scheme for existing Home Loan Borrower’s of Switch to new floating rate.

My Example:
Scheme is : Currently SBI calculates rate like PLR minus some constant.
PLR is 14.5…. So for me home loan rate is 14.5 – 2.25 = 12.25
In new scheme I need to pay 1% of outstanding E.g. for me 12L is outstanding so need to pay 12000 one time cost.
New rates will be 10.75%. So I will be saving 1750 per month. and to recover 12,000 cost I need 7 months.
But as interest rates will be coming down. My doubt is if this new rate 10.75 (This is based on BASE RATE) will also come down.
More details on following.

2 replies on this article “Home Loan Switch from PLR to Base rate”

  1. Dear Sachin, Please accept the switch from PLR to Base rate linking. The base rate ‘ll come down & ‘ll help you to bring down your interest out go. In case of PLR, the actual benefit was not available for old customers as there was a general practice to keep PLR at higher levels. With base rate this practice is not possible.



    1. sachin.shewale@gmail.com says:

      Thanks. Ashal

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