Personal Loan Interest Rate Model
The interest rate applicable to any particular kind of loan will be determined with reference to the following factors:
- The Asset Liability management Committee will from time to time decide the interest and yield to be char ged for each product
- The rate of interest shall be determined based on the cost of borrowed funds, tenor of loan, liquidity conditions prevailing in the market, cost of operations, credit risk arising from the borrower or pool of borrowers and the targeted minimum profit margin
- The customer level credit risk premium as mentioned above shall be based on credit and default risk of the customer as assessed from profile & risk rating of customer, earning and repayment ability of the customer, nature and value of primary and collateral securities, repayment track record of the customers, external ratings of the customers , industry trends, Credit Bureau ratings amongst other factors
- The rate of interest for the same product and tenor availed during same period by different borrowers need not be standardized. It could vary from borrower to borrower depending upon consideration of any or combination of above factors. The annualized rate of interest would be intimated to the customer. The interest rates would be offered on fixed, floating, variable basis. The reference rates, viz Long Term Reference Rate (LTRR) and Short Term Reference Rate (STRR) for the floating rates would be reviewed on a periodic basis and revised interest rates will be intimated to the customer.
- The reference rates and other charges applicable would be hosted and updated on the web site from time to time
- In case of staggered disbursements, the rate of interest would be subjected to review and the same may vary according to the prevailing rate at the time of disbursement or as may be decided by the Company
- Besides normal interest, the company may levy additional/penal interest for delay or default in making payments of any dues. These additional or penal interests may vary for different products.