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Prime Lending Rate

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Every bank is having its own Prime Lending Rate(PLR) i.e. nothing but normal rate of interest on advances. Actual rate of interest will be arrived as follows....

Rate of interest(Loan)= PLR+Spread(normally 2%)+term premia.

Term premia is applicable if your loan repayment is exceeds 3 years.

PLR or Prime Lending Rate is the rate of interest at which bank lends money to its prime customers i.e customers where default risk is zero.

It has been defined under Section 49 of RBI act.............