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What is a floating interest rate housing loan?

April 26, 2017floating HOUSING Interest rate loan

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What is a floating interest rate housing loan?

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A floating interest rate loan is a loan where the interest rate payable is linked to the market conditions such as the bank retail prime lending rate and rises and falls with the bank rate varies. Hence a borrower bears the risk of interest rate fluctuations. Floating interest rates offered are usually lower than the fixed interest rates.