Effective Lending Rates (ELR)

Effective Lending Rates (ELR) is the actual interest imposed on loan amount after factoring in its operational costs, average customer risk margin and the compounded interest.

To calculate the ELR on a home loan, you will need to understand the loan's stated terms and perform a simple calculation.

ELR may vary from one bank to another as it calculated by bank after takes into account the bank's cost of funds and other administrative costs.

For illustration purpose:

Home Loan Amount: RM350,000 (No Lock-In Period)
Home Loan Tenure: 30 years
Standardised Base Rate (SBR) = 3.67%
Interest Rate = SBR + 1.00%
Effective Lending Rate = 4.67%
Monthly instalment (RM) =  1,808.93

The ELR generally depends on the loan amount and loan tenure. Lesser the loan amount and longer the loan tenure would lead you to higher effective rate.

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