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25 years ago most loans were on a Fixed interest rate basis the interest rate would remain constant for the maturity of the loan. Ex: If you have taken a housing loan 25 years ago, the interest rate would be Fixed it remains constant for 15-20 years.
Interest Rates are set by RBI. Banks depend upon RBI guideline rates like Repo rate, CRR (Cash Reserve Ratio to be maintained by Banks), MCLR (Marginal Cost of funds based Lending rate) and SLR for determining their lending rates.
RBI in turn sets these rates based on multiple Macroeconomic factors like Forex rate (compared to USD), Rate of Inflation, GDP Growth Rate etc.
Most Banks now offer Floating rates for long term products like Home Loans taken for 10+ years and Fixed rate for short term loans say a 2 year personal loan or a 3 year car loan or a 2 year Unsecured Business Loan.