Definition of Personal Inflation Rate

Personal Inflation Rate (PIR) is calculated by lending institutions (banks) to assess a borrower’s risk level for loan default and payment delinquency.

The lender looks at the borrower’s (maybe YOU) financial situation currently as far as financial responsibilities and overhead for living and compares that with your near-future financial situation and monthly payments.

The example we use at CLF is a young family with a couple of children and a child on the way, and/or perhaps a child going to college. The bank simply wants to see if you are expecting to making more payments on a monthly basis in the future.

So now you know – when the bank even utter’s anything about your personal inflation rate, you’ll know they are sizing up your personal finances, and is doing a risk analysis on you as a possible borrower. It’s all good and normal.

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BELOW IS A LOAN CALCULATOR FOR CARRYING OUT SOME LOAN CALCULATIONS-------------------------------------------- Enter the loan amount, year of term, interest rate, and payment periods (14 for biweekly, 30 for monthly, 7 for weekly. Very helpful so you know exactly what the loan will cost you in interest payments and you will know the total COB (cost of borrowing).
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This was written by . Posted on Friday, January 2, 2009, at 4:57 pm. Filed under Glossary. Tagged financial definitions, financial glossary, personal inflation rate. Bookmark the permalink. Follow comments here with the RSS feed. Post a comment or leave a trackback.