The base interest rate will be arrived at based on the weighted average cost of funds, risk premium, other costs such as administrative expenses and profit margin. The base interest rate is reviewed periodically by the ALM Committee. The Interest rate applicable to each loan account will be assessed based on multiple parameters like tenure, borrower profile, borrowers repayment capacity based on the cash flows, loan to value of the asset financed, type of collateral security provided by the borrower and past repayment track record of the borrower, etc.
The Company intimates the borrower loan amount, annualized rate of interest and method of application at the time of sanction of the loan along with the tenure and amount of monthly installment. The company also offers variable and equated monthly installments schemes. The other charges such as processing fees, additional interest charged on delayed payments and cheque bouncing charges are mentioned in the Schedule which is part of the Loan Agreement.