BANGALORE: Home loan borrowers in India now have a reason to celebrate. Recently, RBI issued guidelines to the banks for the fair and transparent approval and processing of home loans especially to the common person. RBI took several measures in order to benefit home loan borrowers and especially people who are debt-ridden.

The major problem with which people are dealing today is the floating rate home loans. Floating rate interest on home loans is not a fixed one but allowed to move up and down in accordance with the market. Taking this advantage Banks were quick enough to increase the interest rate on the home loan with the rising interest rates situation in the economy.

But it was too slow to decrease the interest rate along with the decrease rate in the market. For this RBI is planning to work on the idea of introducing a set benchmark rates for floating rate home loan. Though RBI has already stopped charging penalty for prepayment of housing loans of individual customers, it also added that banks should allow their borrowers’ possibility of prepaying floating rate term loans without any penalty.

The home loan customers were excited upon the probable prescription of penalty if the bank harasses by delaying the transfer of documents in case of a transfer of a home loan from one bank to another. The other important factor to be noted about is the credit report; this is the credit information report that bank uses while taking important lending decisions on home loans. While this report is influencing an individual’s home loan approval, one is not even aware of what it is all about. Thus, RBI is in process of letting an individual aware of the credit report either online or through bank.