BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Rate of interest in the initial period is more and it goes down subsequently.
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Rate of interest in the intial period is less and goes up subsequently.
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Fixed Rate of interest charged by Banks
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Floating rate of interest charged by Banks.
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Detailed explanation-1: -For example, if you opt for a home loan for a period of 30 years at an interest rate of 8%, the bank may offer you a teaser loan for which you would need to pay only 6% interest in the initial three years. In the fourth year, your interest rate will switch to 8%.
Detailed explanation-2: -What are teaser loan rates charged by banks? Teaser loan rates are charged by banks on their own discretion. Banks usually attract customers by offering them lower interest rates in the initial years of loan tenure. The initial rate of interest can be as low as 0%.
Detailed explanation-3: -What Is a Teaser Rate? A teaser rate generally refers to an introductory rate charged on a credit product. Credits cards may charge borrowers an introductory rate of 0%. Adjustable rate mortgages (ARMs) are also known for charging a low initial rate that helps entice borrowers.
Detailed explanation-4: -It is an interest rate charged to a customer during the initial stages of a loan. This rate, which can be as low as 0%, is not permanent. It has an expiration after a specified period of time.
Detailed explanation-5: -A teaser loan is any loan that offers a lower interest rate for a fixed amount of time as a purchase incentive. Common teaser loans include credit cards with low introductory offers and adjustable-rate mortgages. Borrowers must be aware of the rates that will apply after a teaser rate expires.