What is a floating rate loan?
A floating rate is one where the rate charged by the bank on your loan keeps changing with respect to the rates in the market over the tenure of the loan. These rates change periodically. Accordingly the tenure increases or decreases or alternatively the EMI increases or decreases based on whether the rates move upwards or downwards.
A. A floating rate is when the interest rate on the loan changes according to the rates in the market during the period of the loan. 9. It is better to opt for a fixed or a floating interest rate? A. If interest rates are falling, a floating rate loan is a better option. But when interest rates are rising, opt for a fixed rate loan, because you will then know in advance what your EMIs will be. 10. Is there a difference between monthly rest & annual rest? A. On the basis of the principal at the start of every month, the interest is calculated in monthly rest. For annual rest, this is done at the beginning of every year. 11. What are the other areas of expenditure before I get a Home Loan? A. Processing and administrative fees, pre-payment charges and delayed payment charges, legal fees, technical fees, stamp duty and registration of mortgage deed are all likely areas of expenditure. 12. Is a guarantor required? A. A guarantor is insisted on by the HFC so as to ensure that the loan is pa
