RBI Rate Cut: Will it Effect on Your Home Loan?
BENGALURU: Recently, while reading a newspaper I came across news saying that the India’s Central Banking Institution, Reserve Bank of India has announced to that it will maintain the same monetary policy rates. Raghuram Rajan, the governor of RBI had asked banks to lower interest rates for retail customers, taking clues from its years experience in policy rate cuts.
With this decision of RBI, banks are likely to cut the EMI rates. The impact of this reduction will encourage banks to pass on the benefits to customers efficiently. Thanks to The Economic Times which has revealed how the reduction in lending rates will affect our home loan.
According to the new rate cuts, you will get some relief than before. Suppose, you have a loan of 
50 lakh with an interest rate of 10.10 percent which is termed for 20 years. The EMI that you usually pay will be reduced with a 15 basis point cut. After the reduction, you be happy to know that you will save 498 per month from what you used to pay earlier.
When the loans rates are cut banks usually do not make mush changes in the EMI amount instead they reduce the loan duration that was decided at the time of your loan approval and sanction process. The impact of this rate cut depends on the loan tenure.
The State Bank of India has already taken its steps forwards by reducing its home loan rate up to 9.95 percent. So, it’s time for you to check on your lender whether it is charging you more or not. If you feel that you have been charged high interest compared to other banking institutions, you can switch to the one that will help you with better benefits.
Read More:
