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<ul><li>Opt for sustainable projects which offer discounts on the <keyword id="6397939" type="General" weightage="20" keywordseo="interest" source="Orion">interest</keyword> rate. </li><li>A woman co-borrower as the primary applicant can lead to savings on interest rate as well. </li><li>A <keyword id="6354730" type="General" weightage="20" keywordseo="home-loan" source="Orion">home loan</keyword> overdraft scheme can also lead to savings on interest payments. </li></ul>Buying a home is one of the biggest financial goals one has and since a home loan is a commitment for several years, a lower interest rate could lead to substantial savings. In other words, a difference of a few basis points can lead to savings of a few thousand every month. We look at some ways to reduce your home loan interest. <cmsannotation type="cmsannotation" annotationid="Sustainable project option" comment="Subhead" text="Sustainable project option">Sustainable project option</cmsannotation> Recently, Axis Bank tied up with real estate developer Mahindra Lifespaces to offer a 0.25% discount on the interest on green homes. In June this year, SBI announced that it has plans to incentivise green home buyers by offering them a 10-25 basis points discount on prevailing home loan rates. “Extending loans at concessional rates for green homes incentivizes home loan takers to buy and invest in sustainable residential buildings. It will have a long term and a positive domino effect to build, buy and sell environment-friendly buildings,” says Vimal Nadar, senior director, research head, Colliers India. Green housing in India faces affordability and awareness challenges, especially in affordable and mid-range segments. Collaborations between housing finance and real estate firms can boost green home popularity among Indian buyers. “Such a tie-up resulting in discounted interest rates for green homes could potentially kick-start a broader trend - especially if the interest rates are reduced enough to offset the 10-15% premium that green homes typically command to a significant extent,” says Santhosh Kumar, vice chairman, ANAROCK Group. This can attract more middle class customers to eco-friendly projects. <cmsannotation type="cmsannotation" annotationid="Women borrowers are offered lower interest rates" comment="Subhead" text="Women borrowers are offered lower interest rates">Women borrowers are offered lower interest rates</cmsannotation> Most banks offer a concessional rate to women borrowers. The usual discount provided is 5bps or 0.05%. If a woman with a good credit score is the primary borrower, it can mean a discount in the interest rate. <cmsannotation type="cmsannotation" annotationid="Subhead" text="Consider a home loan overdraft scheme">Consider a home loan overdraft scheme</cmsannotation> The home loan overdraft scheme works pretty much current accounts with an overdraft limit. “Under the scheme, you can deposit any surplus that you have into your home loan account. This surplus will be considered as prepayment against the <keyword id="25058" type="General" weightage="20" keywordseo="principal" source="Orion">principal</keyword>,” says Adhil Shetty, CEO, BankBazaar, a financial marketplace. The principal amount on which the loan interest is calculated is the outstanding principal minus the savings deposited in the home loan account over and above the monthly instalment or EMI. If you have been making regular deposits to the account, your outstanding principal would proportionally reduce. This brings down the overall loan liability. A benefit of the home loan overdraft scheme is the savings on interest. “If you keep making regular repayments, your principal, and therefore the interest you pay on it, keep reducing. This translates into substantial cost savings,” says Shetty. However, it is important to remember that the home loan overdraft scheme is typically suitable for double income families with regular surplus income or businesspersons who receive surplus funds regularly. Also Shetty says that home loan overdrafts usually tend to be more expensive by approximately 25 basis points. Therefore, if you do not have a chance to generate a regular surplus amount, the home loan overdrafts may not be the right choice. <cmsannotation type="cmsannotation" annotationid="Refinance your home loan" comment="Subhead" text="Refinance your home loan"><keyword id="59525" type="General" weightage="20" keywordseo="refinance" source="Orion">Refinance</keyword> your home loan</cmsannotation> In March 2020, the difference between the lowest home loan rates and the prevalent repo rate was 2.75, going up to 3.50 in many cases. This difference has fallen steadily. By March 2021, it had reduced to 2.65. A year later, it fell to 2.40. “If you have an ongoing loan, you may want to consider refinancing your loan. This is because the spread on the loan has fallen,” says Shetty. Currently, there are many lenders pricing themselves at 2.00 over the repo, with a few going as low as 1.95 with their special offers. So refinancing your loan may help you bring down the interest rate. So, while taking a new home loan or if you already have an existing home loan, there are ways you can look to save on interest.

Four ways to reduce interest rate on your home loan

<ul><li>Indian companies will likely have to contend with the fact that <keyword id="1384155" type="General" weightage="100" keywordseo="wfh" source="Orion">WFH</keyword> is here to stay. </li><li>A new report by <keyword id="13222" type="General" weightage="80" keywordseo="sbi" source="Orion">SBI</keyword> has revealed that thanks to WFH’s popularity, Indians are increasingly obtaining home loans in Tier 3 and Tier 4 districts. </li><li>As a result, housing demand and prices have also increased at a faster pace when compared to Tier 1 and Tier 2 districts. </li><li>Women home loan borrowers also account for half of fresh disbursals in the top 20 districts in T3 and T4 districts. </li></ul>The boom in Work from Home in the post-pandemic era is now reflecting in home loan growth, according to a report by State Bank of India. While companies in India and around the world are increasingly demanding their employees to return to offices, it looks like at least some of them have decided to set up offices in their homes. “Working from Home is redefining the priorities as households are shifting into digital offices within their own homes in Tier 3 and Tier 4 districts,” the report by SBI said. The report further adds that this has not only led to the growth in loans being faster in T3 and T4 districts, even the average loan sizes have increased much more when compared to Tier 1 and 2 districts between FY19 and FY22. Overall, home loans have grown at a compounded annual growth rate (CAGR) of 11% since FY19, but T3 and T4 districts have grown at a faster pace of 12-13%. “As the pandemic forced buyers to reassess the work-life balance, cities having better infrastructure connect have found renewed interests from new-gen buyers whose digital lifestyle enables them to connect to work from anywhere,” the report adds. <div type="Article" hostid="261" msid="94220904" title="For every ₹100 pulled out by foreign investors from the Indian equity markets, domestic investors have ploughed back ₹89 this year" mstype="2" mssubtype="0"></div> <cmsannotation type="cmsannotation" annotationid="Housing demand and prices are increasing at a much faster rate, too" comment="subhead" text="Housing demand and prices are increasing at a much faster rate, too">Housing demand and prices are increasing at a much faster rate, too</cmsannotation> T3 and T4 districts are shining in other areas, too – according to the report, both housing demand and prices are growing at a much faster rate. “Many tier-2 cities including Visakhapatnam, Guwahati, Raipur, Surat, Vadodara, Jaipur, Lucknow, Dehradun and tier-3 city Coimbatore have witnessed higher growth in housing prices,” the report said. It attributes this growth to an increasing trend of WFH and freelance jobs. Women account for nearly half of the loans in the top 20 districts. In fact, two districts – Dang in Gujarat, and Arwal in Bihar stand out where 86% and 75% of fresh loans were sanctioned to women, respectively. A couple of reasons for this could be the additional subsidies of up to 0.1% on interest and the simpler eligibility criteria, making home loans an attractive proposition for women. <cmsannotation type="cmsannotation" annotationid="Fresh disbursals to T3 and T4 districts also register growth" comment="subhead" text="Fresh disbursals to T3 and T4 districts also register growth">Fresh disbursals to T3 and T4 districts also register growth</cmsannotation> The share of T3 and T4 districts in fresh disbursals has also registered growth between FY19 and FY22, the report says – together, T3 and T4 districts account for 36% of fresh disbursals in FY22, up from 32% in FY19. More specifically, Uttar Pradesh, Karnataka and Punjab top the list when it comes to growth in fresh disbursals – 6 districts of UP, and 5 districts of Karnataka and Punjab each figure amongst the top 20 in T3 and T4 categories. One of the reasons for the growth in UP, specifically, is the launch of the SVAMITVA scheme by the Indian government wherein rural people are given the right to document their residential properties so that they can use their property for economic purposes. Essentially, this scheme enables rural people to document their properties and then use them for obtaining loans and other financial benefits. So far, 20.8% of villages in UP have been covered, and that seems to have had an impact on fresh loan disbursals already. <div type="Article" hostid="261" msid="94388449" title="Reliance New Energy picks up 20% stake in Caelux to shore up its position in advanced solar tech" mstype="2" mssubtype="0"><payload><![CDATA[seealso]]></payload></div> <div type="Article" hostid="261" msid="94366341" title="The Adani effect: Ambuja Cements rallies 40% in one month – analysts suggest good days ahead for the cement industry" mstype="2" mssubtype="0"><payload><![CDATA[seealso]]></payload></div> <div type="Article" hostid="261" msid="94304653" title="Story in charts: How Indian equity, gold and debt investments have performed over the past two decades" mstype="2" mssubtype="0"><payload><![CDATA[seealso]]></payload></div>

Home loans growing at a faster rate in Tier 3 and 4 districts, thanks to WFH: SBI report

<ul><li>Since May 2022, the EMI per lakh has gone up from ₹899 to ₹1,044. </li><li>Consider refinancing only if you stand to gain at least 50 to 100 bps reduction on your current loan. </li><li>You may choose to prepay your loan or pay extra EMI every quarter or little over your regular EMI every month. </li></ul>After RBI raised the repo rate by 25 basis two points two weeks ago, most banks have raised their interest rates. Between May 2022 and February 2023, the RBI has raised the repo rate by 250 bps. The banks have transmitted almost all the rate hikes, or are in the process of doing so in the next few weeks. This means the interest per lakh on a 15-year loan has gone up from approximately ₹62,000 to approximately ₹87,000. The EMI per lakh has gone up by 16%, from ₹899 to ₹1044. So, for a ₹50L loan for 15 years, your EMI would have gone up from ₹44,941 at 7% to ₹52,211 at an interest rate of 9.5%. Prepaying your <keyword id="6354730" type="General" weightage="20" keywordseo="home-loan" source="Orion">home loan</keyword> can reduce the EMI burden: In case of existing borrowers, lenders typically tend to increase the tenor of the loan instead of the EMI. However, for a loan with 15-year outstanding, a 2.5% increase means an increase of 7 years and 6 months. “So, unless you have been pre-paying diligently, and probably despite that, the lender may not have enough room to extend the tenor alone. So, it is inevitable that the EMI would have gone up. In this situation, the only alternative is to pre-pay aggressively,” says Adhil Shetty, BankBaazar.com. “The time to repay slowly at 7% and invest in instruments providing 10-12% returns is over. You need to make a prepayment plan that works for you and start prepaying your loan. The idea isn’t to liquidate all existing investments to close the loan, but to prepay strategically to minimize the impact of the hike,” says Shetty. He suggests choosing to prepay 5% of your outstanding principal each year. This has the potential to reduce a 20-year loan to 13 years. Alternatively, you can pay an extra EMI every quarter or little over your regular EMI every month. You can decide how to do this based on your finances and liquidity. Consider refinancing your home loan: “As a thumb rule, consider refinancing only if you stand to gain at least 50 to 100 bps reduction on your current loan. Refinancing your loan is similar to applying for a new loan and has all the incumbent expenses such as processing fees, MOD charges, legal fees, etc. So make sure you account for these expenses when you transfer your loan,” says Shetty. Use a home loan refinance calculator to calculate how much you would save on interest when you switch. Factor in the penalties, fees, and charges to get a realistic estimate. Also negotiate with your lender for better rates before opting for refinancing. “One must switch the loan early on during the tenure. If you do so after 5 years or so, you would have already paid off most of the interest amount,” says Atul Monga, co-founder and CEO, BASIC Home Loan. The minimum rate at which you can get a loan depends on your credit score. Lenders charge anywhere between 50 to 200 bps as credit risk premium over the benchmark-linked rate. “So if your credit score has improved over time, you may be able to refinance to get a lower rate of interest. This is particularly significant if you didn’t have a credit score and your home loan was your first loan,” adds Shetty. Ways to lower your interest rates: “If you are a new borrower, the best way to avail of lower interest rates is to make a higher down payment. If you do not have too much of a surplus income but have an excellent CIBIL score, lenders may offer you lower interest rates,” says V Swaminathan, executive chairman, Andromeda Loans. This is because your credit history reflects that you have a good record of paying back debts. However, if you have poor credit scores or an unsteady source of income, you are viewed as an untrustworthy borrower. In such a situation you may have to take a home loan from a NBFC instead of a bank. Currently, if your CIBIL score is above 800, you are eligible to get a home loan at 9.15% interest from SBI. However, if your credit score is between 700-749, the interest rate is 9.35%. For an even lower credit score of 55-649, the interest rate is 9.65%. If you are planning to borrow in the coming year, take this time to build up a solid credit score and history to get a loan at lower interest rates. SEE ALSO <a href="https://www.businessinsider.in/finance/news/how-upi-lite-can-make-it-faster-and-easier-to-make-small-payments/articleshow/98035931.cms">Explained: How UPI LITE makes small payments faster &amp; easier</a> <a href="https://www.businessinsider.in/finance/news/demand-supply-mismatch-pushes-home-rents-across-india-by-13-5-in-2022-magicbricks/articleshow/97804664.cms">Demand-supply mismatch pushes home rents across India by 13.5% in 2022: Magicbricks</a>

Look to refinance your home loan to save on EMI payments

<ul><li>You may increase your <keyword id="6357050" type="General" weightage="20" keywordseo="emi" source="Orion">EMI</keyword> to up to 40-50% of your income at the most. </li><li>Prepayment should be considered only if one has enough savings. </li><li>Consider refinancing only if you stand to gain at least 50 to 100 bps reduction on your current loan.</li></ul>Home loans are long-term loans which mostly have a tenure of 15 years or more, and <keyword id="6371181" type="General" weightage="50" keywordseo="interest-rates" source="Orion">interest rates</keyword> could go up and down during this period. However, a recent series of <keyword id="136281" type="General" weightage="20" keywordseo="rate-hikes" source="Orion">rate hikes</keyword> has been nightmarish for <keyword id="6354730" type="General" weightage="100" keywordseo="home-loan" source="Orion">home loan</keyword> borrowers. Between May 2022 and February 2023, the Reserve Bank of India (RBI) raised the repo rate by 250 bps. New home loan borrowers who took their loan under the external benchmark-based lending rates (EBLR), have seen their home loan interest rates rise the quickest in tune with the repo rate hike. When the rates move up or down, the industry practice is to change the tenure of the loan as it is convenient for the customer. “However, customers who would not like the tenure of their loan to increase can approach their lender, and increase their EMI or even partly increase their EMI, and partly tenure. There is no cost to change the EMI or tenure,” says Renu Sud Karnad, managing director, HDFC. She adds that most lenders, including HDFC, have a process in place that if extension of the term goes beyond a certain comfort level, the customer is educated about the need to revise the EMI. Hence it is advisable for the customers also to stay in touch with their lenders. <cmsannotation type="cmsannotation" annotationid="How the recent interest rate hikes will affect you" comment="subhead2" text="How the recent interest rate hikes will affect you">How the recent interest rate hikes will affect you</cmsannotation> Theoretically, for a 15-year loan, a 2.5% increase from 7% to 9.5% means that the tenure goes up by 90 months or 7.5 years. “For longer tenures like 20 or 25 or 30 years, the additional tenure can be as much as 20 additional years, depending on rate of interest,” says Adhil Shetty, CEO, BankBazaar, an online financial marketplace. Given that the interest rates on home loans have gone up substantially since last year, the lenders prefer to increase the EMI to ensure that the tenure does not go up by more than a few years. “If you are in the middle of your repayment period and have more than twice the remaining tenure to retire – say you are half-way through your 20-year loan and are in your late 30s or early 40s – the lender may extend your tenure instead of increasing your EMIs, especially if you have been prepaying your loan,” says Shetty. However, if you are in your late 40s or early 50s you would have to close the loan by the time you reach <keyword id="25452" type="General" weightage="80" keywordseo="retirement" source="Orion">retirement</keyword> age. <cmsannotation type="cmsannotation" annotationid="What you can do" comment="subhead2" text="What you can do">What you can do</cmsannotation> In such a situation, a borrower has several options open to him. Increase the EMI: If the borrowers have a significant portion to pay off, they can increase their EMI until they are 60 to 65 years of age (depending on their lenders). “In these cases, borrowers can increase their EMI by 5% once a year. This annual exercise will increase your tenure and buy you some more room to pay off the loan amount,” says V Swaminathan, executive chairman, Andromeda Loans, a loan distributor. As a rule of thumb, your home loan EMI should not be more than 35-40% of your income. Even if you stretch this, most banks will restrict your home loan EMI to 50% of your income. Thus, increasing the EMI beyond a certain point is not feasible. Prepay your home loan: Another option is to prepay the home loan, which means paying a part of the loan amount earlier than the planned repayment period. “In the case where it is not possible to increase one’s EMI, one option is to prepay strategically to reduce the impact of the rate hike. Prepayment should be considered only if one has enough savings. In case the customer does not have enough savings, he could instead focus on making small pre-payment each year to increase saving on the home loan,” says Pramod Kathuria, founder &amp; CEO, Easiloan, a digital home loan marketplace. However, out of 5.5 million home loans linked to EBLR, only 0.82 million have the capability to make prepayments to ensure their tenures or EMIs don’t shoot up, as per an analysis by SBI research. Those who are not able to prepay their home loans may consider some other options to pay off their home loan before retirement. Get a co-applicant: “If you are nearing your retirement but still have not repaid a significant portion of your loan, you can try securing a co-applicant or a guarantor,” adds Swaminathan. If the co-applicant’s retirement is at a later stage, one can convince the bank to increase the tenure. Refinance your home loan: The other option is to refinance your home loan. Some lenders have slashed their home loan interest rates in light of reduced demand. “If your current rate is 0.5-1% higher than the prevailing rates, then refinancing your loan to a lower rate may be a good idea. Refinancing to a lower rate and repaying a higher EMI would be even better. Check with your own lender before you refinance, as it may be an easier option,” say Shetty. Having a co-applicant with a good credit score and a steady income may help you avail lower interest rates. Home loan borrowers may also be wondering where the interest rates are headed next. “On the interest rate front, in my personal opinion, we are almost at the end of the rate hike cycle considering that factors like inflation could ebb as crude prices, which have the biggest impact on inflation in India, are down to a 15-month low,” says Karnad. There is no one right option to pay off your home loan before retirement. It depends on your financial situation and the additional monthly outflow you can take up. You can opt for one or all of these options simultaneously, depending on what you can afford. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/entertainment/news/not-just-for-ott-people-rely-on-digital-to-discover-engage-with-content-across-tv-and-movies/articleshow/99092414.cms">Not just for OTT, people rely on digital to discover &amp; engage with content across TV and movies: BCG-Meta Report</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/removal-of-commissions-caps-for-insurance-agents-likely-to-result-in-increased-product-innovation-sanjiv-bajaj/articleshow/99091375.cms">Removal of commission caps for insurance agents likely to boost innovation, customer-centricity</a>

Rising interest rates hitting you hard? Here’s how to ensure your home loan is paid off before retirement

SBI, Kotak Mahindra and others cut home loan rates ahead of festive season

<ul><li>RBI tightens capital norms for lenders disbursing unsecured loans like <keyword id="35520" type="General" weightage="20" keywordseo="personal-loans" source="Orion">personal loans</keyword>, credit card receivables.</li><li>Experts say that the central bank aims to stem unsecured loan growth which has been growing at 26% for the last five years.</li><li>The move might also have a spillover effect on fintechs who aggressively push <keyword id="9522245" type="General" weightage="20" keywordseo="bnpl" source="Orion">BNPL</keyword> schemes.</li></ul>The Reserve Bank of India tightened capital norms for lenders disbursing unsecured loans to unsuspecting borrowers on Thursday evening and there is a rationale behind this move. Given the slowdown in corporate loans, banks have been chasing retail customers for loans. Such has been the rush to offer loans that top-ups are being offered even on auto loans which is just a camouflaged unsecured credit. For example, Suresh Chandra (name changed) had a ₹15 lakh car loan that had to be paid off in 12 months. Before he could repay his existing auto loan, he was being inundated by banks and NBFCs luring him into taking more loans. A large private bank offered him a top-up loan that’s akin to the value of his car, and another wanted to offer a loan that was 150% of the part of the loan that had already been paid off. “Sometimes I get tempted to take up on these offers. Also because technically auto loan interest is lower and they’re offering the top-ups at the same rate. If I need money, I will surely take this up instead of a new personal loan,” Chandra told Business Insider India. Giving a top-up loan is a good way for banks and NBFCs to push across new loans to borrowers. A top-up loan is an additional credit that’s given over and above an existing loan and when opting for a balance transfer. It doesn’t come with end-use restrictions and requires minimum documentation. Now, India’s central bank has cracked down on lenders to stall this aggressive loan push to consumers on Thursday by tightening capital norms. Not only has it classified top-up loans as unsecured loans, it also increased risk weight on unsecured loans like personal loans, credit card receivables, consumer credit and more such. It will make it tougher for them to give out loans as easily and freely to consumers. RBI puts up a ‘STOP’ sign Banks and NBFCs have been giving out too many unsecured loans. Unsecured retail loans have been growing at a 26% compounded annual growth rate (CAGR) between FY18 to FY23, as per Nomura. In FY18, unsecured retail loans were 7.8% of bank credit and now they’re as high as 10.6%. All this has happened by chasing after consumers for loans. “We view this as a clear signal from the regulator that it wants to bring down the strong growth in these segments, which is being brought into effect by bringing about an increase in the effective cost of capital for lending to these segments,” says a report by Nomura. Experts say that RBI’s move will control the increasing delinquencies and high risks associated with lending in the unsecured loan segment. Due to increased risk weightage, lenders should have to cover for more credit risk in the unsecured loan segment and it will make lending more expensive. The loans will also turn more expensive for borrowers. “RBI has been cognizant of the high increase in unsecured lending and initial delinquency trends seen in the unsecured loan segment. While this might look like a small piece in the overall picture, the RBI is cautious enough to take an early step in controlling the same,” says Ameet Venkeshwar, chief business officer at LoanTap. The credit standards will also get tighter, experts hope. Most top banks offer personal loans at interest rates ranging between 10-26% depending on creditworthiness. These loans can go as high as ₹20 lakh and the minimum income limit has to be ₹30,000 to become eligible for such loans. Personal loan interest rates and processing fees <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Lender </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Interest Rate p.a. </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Processing Fee </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Loan tenure </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HDFC BANK </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">10.5-21% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 2.5% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">12-60 months </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ICICI BANK </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">10.5-16% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 2.5% + GST </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 60 months </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HOME CREDIT CASH LOAN </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">24-34% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">2.5-5% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 48 months </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ADITYA BIRLA CAPITAL </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">14-26% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 2% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">12-72 months </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">AXIS BANK </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">10.49-22% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 2% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 60 months </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">SBI </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">11.05-14.05% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 1.5% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to 72 months </td></tr></tbody><tbody></tbody><tbody></tbody></table>Source: Bank websites and Bankbazaar Thou shall not tempt The free flow of personal loans has been pushing credit culture in the country. Preeti Mishra, a professional from Mumbai has a similar story. “I swiped as much as ₹50,000 on my debit card to pay my child’s school fees. Immediately, I got a call from my bank offering to convert that payment into a loan which can be paid off in installments. Why would I want to take a loan which I can afford to pay?” she says. Like Chandra, she also says that it’s fairly tempting. “Even if I was in a tad bit of a money crunch, I would have taken up the loan. And, in the long run, it would have made it tougher for me,” she worries that one bad day she might actually fall into a trap. Sumanto Roy is one such who has fallen into it, and now swimming at the deep end. The 27-year-old earns ₹60,000 per month. He already has a car loan that takes away ₹10,000 per month, another ₹8,000 as EMI for his phone and another ₹12,000 goes off his bank account every month as his laptop EMI. If Roy wasn’t living with his parents, he would have found it very tough to get by with this loan burden. “It’s difficult to pay off my credit card bill every month. I roll it over by making the minimum payment. Now, I am saving and trying to pay off my dues as fast as possible,” he tells Business Insider India adding that the loan burden is distressing him personally. Will BNPL hold on? However, banks and NBFCs are one side of the aggressive loan push story. There is a rising number of Buy Now Pay Later startups, companies that integrate EMIs while checking out of e-commerce websites, and VC-funded startups that loan for people who borrow to go on a holiday or a date. Experts believe that RBI’s move might change the dynamics of some of these fintechs to some extent. Jefferies expects PayTm’s consumer loan disbursal growth to normalize from around 90% in FY24 to 40% in FY25 and 35% in FY26. “For Paytm's lending partners, higher funding costs and increased capital requirements will affect product profitability in BNPL/PL. They may respond by tightening credit standards and/or moderating growth from elevated levels right now,” Jefferies says. Giving loans is a good business in today’s world where GenZs, especially are focussed more on ‘experiences’, want to live the good life. On the other hand, the new-age apps advertise in a buzzing manner day in and day out with taglines like — ‘Download, pay your credit card bills and earn rewards’. The lure of loan was always there. At the end of the day, lenders are different when you take the loan, and when it’s the time to pay up. Sooner or later, they would want their pound of flesh right at the heart. SEE ALSO <a href="https://www.businessinsider.in/business/news/wine-vs-tea-indias-consumption-trends-show-a-sharp-divergence/articleshow/104810168.cms">Wine vs Tea: India’s consumption trends show a sharp divergence</a> <a href="https://www.businessinsider.in/business/news/bitten-by-inflation-indians-buying-fewer-clothes-this-season/articleshow/105179140.cms">Bitten by inflation, Indians buying fewer clothes this season</a>

The dark truth behind RBI’s crackdown on easy personal loans

<ul><li>RBI has hiked interest rates for the second consecutive month to 4.9% to fight surging inflation.</li><li>The <keyword id="6543013" type="General" weightage="20" keywordseo="real-estate-sector" source="Orion">real estate sector</keyword>, which was witnessing good pickup in sales due to the low cost of financing, could be impacted by RBI’s rate hike move.</li><li>The increasing rate of interest will slowdown customer demand for <keyword id="35519" type="General" weightage="20" keywordseo="home-loans" source="Orion">home loans</keyword> going ahead.</li></ul>The 50 basis point interest rate hike by the Indian central bank was greatly anticipated. So much so that a few banks have started hiking their home loan rates ahead of it. “Just last night I got a message from Axis Bank that they are increasing my home loan's rate of interest to 7.1%. Today, after the new hike in RBI's repo rate, I guess it will jump to 7.6%. This was expected but it is still difficult to wrap my mind around it,” said Karuna Sharma, a Mumbai resident who took out a home loan at 6.7% last year. It’s not just those paying the EMI, but real estate developers too are worried about the extent of rate hike — which will affect the economics of <keyword id="185169" type="General" weightage="20" keywordseo="homebuyers" source="Orion">homebuyers</keyword>. For them, a 50 basis point hike is a large debt. “A hike was inevitable, but we are now entering the red zone. Any future hikes will reflect markedly on housing sales.The rate hike will push up home loan interest rates, which had already begun creeping upward after the surprise monetary policy announcement last month,” said Anuj Puri, chairman at Anarock property consultants. The segments that will be worst affected will be affordable and mid-segments, the consultant says. It will also affect the volumes at large and also reverse the trend of robust growth in real estate sales in the last two quarters. The number of residential launches have also grown up and that’s reflecting in higher sales — but it might soon go away. However, this interest rate hike will dent homebuyer’s confidence. “From a real estate perspective, this hike in the policy rate comes as a hurdle as home loan rates will increase, putting a dent on the homebuyer's sentiments. Any increase in the interest rate will further impact the costs of doing business,” said Ramani Sastri, chairman &amp; MD at Sterling Developers. Home sales also increased as several large companies asked their employees to return to work — which suffered a temporary setback due to the onset of the third wave of Covid-19, said a report by Kotak Institutional Equities. Now that Covid cases are also inching up and interest rates are also high, the trend might take a turn for the bad. The overall increase of about 1% in the cost of funds by the RBI over the last few months will impact the overall feasibility of large projects, infrastructure and long gestation projects. This development comes at a time when the real estate sector is dealing with its own raw material inflation. Since loans would now get costlier, they would have limited space to increase prices. “A rise in inflation can soften the stance on an otherwise robust real estate industry. Meanwhile, the government should also make concentrated efforts to reduce the spike in prices of raw materials such as cement, bricks, steel, etc. This will also give some relief to the sector,” said Suren Goyal, partner at RPS Group. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/banks/news/indias-biggest-lender-sbi-has-a-new-managing-director-alok-kumar-choudhary/articleshow/92078145.cms">India’s biggest lender appoints Alok Kumar Choudhary as new MD soon after top brass rejig</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="http://www.businessinsider.in/finance/banks/news/fino-payments-bank-has-the-most-number-of-micro-atms-in-india/articleshow/92076552.cms">Not SBI, ICICI or even HDFC - this bank has the most number of microATMs in India</a>

Home loan rates enter red zone — will dent affordable and mid segment sales the most

<keyword id="640142" type="General" weightage="100" keywordseo="housing-finance-company" source="Orion">Housing Finance Company</keyword> HDFC has increased its Retail Prime Lending Rate (<keyword id="413108" type="General" weightage="50" keywordseo="rplr" source="Orion">RPLR</keyword>) on housing loans by 5 basis points. The revision would come into effect from Wednesday itself. The upward revision in rates will essentially lead to an increase in EMIs for borrowers. The hike in rates came close on the heels of central bank <keyword id="30067" type="General" weightage="50" keywordseo="rbi" source="Orion">RBI</keyword>'s recent hike in repo rate by 40 basis points, besides giving indications it would raise rates further in the upcoming monetary policy review meets. On Wednesday, <keyword id="62034" type="General" weightage="50" keywordseo="punjab-national-bank" source="Orion">Punjab National Bank</keyword> (<keyword id="47268" type="General" weightage="50" keywordseo="pnb" source="Orion">PNB</keyword>) too raised its marginal cost of funds-based lending rate by 15 basis points with immediate effect. Recently, banks such as <keyword id="13222" type="General" weightage="50" keywordseo="sbi" source="Orion">SBI</keyword> and <keyword id="6358007" type="General" weightage="50" keywordseo="bank-of-baroda" source="Orion">Bank of Baroda</keyword> too have hiked their lending rates across various tenures, as per reports. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="http://www.businessinsider.in/tech/mobile/news/moto-g82-5g-expected-to-launch-in-india-on-june-9-expected-price-specs-and-everything-you-need-to-know/articleshow/91919825.cms">Moto G82 5G expected to launch in India on June 9 – expected price, specs and everything you need to know</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="http://www.businessinsider.in/cryptocurrency/news/an-indian-home-can-live-for-a-year-with-the-energy-it-needs-to-mine-a-single-bitcoin/articleshow/91916128.cms">An Indian home can live for a year with the energy it needs to mine a single Bitcoin</a>

HDFC raises lending rates on housing loans by 5 basis points

<ul><li>Home loan interest rates in India are lower than they’ve been in at least a decade. </li><li><keyword id="6354731" type="UNKNOWN" weightage="20" keywordseo="state-bank-of-india">State Bank of India</keyword> (SBI), <keyword id="6357149" type="COMPANY" weightage="20" keywordseo="hdfc-bank">HDFC Bank</keyword>, <keyword id="6355975" type="COMPANY" weightage="20" keywordseo="axis-bank">Axis Bank</keyword> were among the first to slash their <keyword id="6419450" type="UNKNOWN" weightage="20" keywordseo="home-loan-rates">home loan rates</keyword>, with <keyword id="51925" type="CITY" weightage="20" keywordseo="Union-Bank">Union Bank</keyword> of India and <keyword id="6358007" type="COMPANY" weightage="20" keywordseo="bank-of-baroda">Bank of Baroda</keyword> being two newest entrants.</li><li>Select banks are also waiving processing fees and offering to take on the legal and valuation fees if borrowers want to switch over from another bank. </li></ul>Home loan interest rates have never looked this attractive in India in at least the past decade. Banks want people to take loans, and there are plenty of options for those looking to set up a new house as ‘working-from-home’ gains ground and may become the new reality. Union Bank of India and Bank of Baroda are two newest lenders to slash their home loan interest rates. India’s largest banks, including the State Bank of India (SBI), HDFC Bank, Axis, and <keyword id="6376194" type="COMPANY" weightage="20" keywordseo="kotak-mahindra">Kotak Mahindra</keyword>, are already offering home loans at heavily discounted rates. Union Bank of India currently offers the lowest home loan rate at 6.7% for women who are salaried and have a decent CIBIL score. State Bank of India <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Home loan interest rate for loans up to ₹30 lakh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6.9% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Home loan interest rate for loans greater than ₹30 lakh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">7% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Processing fees </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹4,000 - ₹17,400 </td></tr></tbody></table> Borrowers will be eligible for an interest rate concession of 25 basis points (bps) — 100 basis points form 1% — for home loans of more than ₹75 lakh depending on their CIBIL score at <a href="https://homeloans.sbi/">SBI</a>. Those applying for a home loan using SBI’s mobile app, YONO, can avail of an additional concession of 5 bps. SBI will also waive all processing fees for those applying through the app. Women borrowers will be provided another 5 bps off their interest rate. Kotak Mahindra Bank Kotak Mahindra Bank hasn’t laid out the slabs, but like SBI, its home loan interest rates start at 6.9%. In order to try and swipe some customers from other banks, <a href="https://www.kotak.com/en/personal-banking/loans/home-loan.html">Kotak Mahindra</a> claims borrowers with loan accounts elsewhere can save upto ₹20 lakh if they switch over. Women will also be eligible for special rates across loan products. Axis Bank <a href="https://www.axisbank.com/retail/loans/home-loan/axis-bank-home-loan/features-benefits">Axis Bank</a> is also offering loans starting at 6.9% interest rate per year for home loans under their ‘Dil Se Open Celebrations’ scheme ahead of the festive season. HDFC Bank As a part of <a href="https://www.hdfcbank.com/personal/borrow/popular-loans/home-loan">HDFC Bank</a>’s ‘Monsoon Bonanza’ scheme, home loan interest rates have been lowered to 6.9%. Under the offer, borrowers can avail of a home loan up to 90% of the property value, lower processing fees will apply, and there is no pre-payment of charges on foreclosure. The bank charges a 0.5% processing fee on banks, but the absolute amount has been capped at ₹3,000. <keyword id="6653" type="CITY" weightage="20" keywordseo="ICICI-bank">ICICI Bank</keyword> <a href="https://www.icicibank.com/Personal-Banking/loans/home-loan/index.page">ICICI Bank</a> is offering a 6.9% home loan interest rate, but not waiving off the processing fees, which start at around ₹3,000. Depending on the quantum of the loan and the credit score of the borrower, home loan interest rates can go as high as 7.95%. Union Bank Union Bank has slashed its home loan interest rates by 10 bps for home loans above ₹30 lakh, settling in at 7%. Women borrowers can avail of an additional concession of 5 bps. There will be no processing fee on home loans till December 31. Bank of Baroda Bank of Baroda has cut its home loan interest rates down by 15 bps. Now the interest rate on home loans is at part with education loans at 6.85% interest. The bank has waived processing fees for new loans and will bear the legal and valuation charges should a borrower wish to switch over from another bank. In an additional bonus, those who have a credit score of 700 or higher may be eligible for lower home loan interest rates that will be evaluated on a case-by-case basis. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/icici-bank-surges-6-after-it-posts-six-fold-jump-in-net-profit-at-over-42-billion/articleshow/78992379.cms">ICICI Bank surges 6% after it posts six-fold jump in net profit at over ₹4,200 crore</a> <a href="https://www.businessinsider.in/india/news/covid-19-vaccine-updates-pfizer-moderna-to-roll-out-covid-19-vaccine-by-december/articleshow/78924143.cms">COVID-19 vaccine updates: Covaxin, India’s first indigenous COVID vaccine, is likely to be launched by mid-2021, Israel starts human trials</a> <a href="https://www.businessinsider.in/defense/news/xi-and-modi-to-come-face-to-face-thrice-this-month-even-as-china-embarks-on-its-rail-and-road-border-project/articleshow/78995991.cms">Xi and Modi to come face-to-face thrice this month even as China embarks on its rail-and-road border project</a>

Home loan rates hit record lows as SBI, HDFC, Kotak, and others go on a slashing spree ahead of festive season

<keyword id="6354731" type="DOMAIN" weightage="20" keywordseo="state-bank-of-india">State Bank of India</keyword> on Friday announced an <keyword id="413700" type="PERSON" weightage="20" keywordseo="interest-concession">interest concession</keyword> of up to 30 basis points on home loans and a 100 per cent waiver on <keyword id="515211" type="PERSON" weightage="20" keywordseo="processing-fees">processing fees</keyword>. The new home loan interest rates are linked to CIBIL score and start from 6.80 per cent for loans up to Rs 30 lakh and 6.95 per cent for loans above Rs 30 lakh, a bank release said. Women borrowers will get a <keyword id="44979" type="PERSON" weightage="20" keywordseo="concession">concession</keyword> of 5 bps, it said. "With an aim to offer attractive concessions to the home buyers, country's largest lender SBI announces further interest concession of up to 30 bps on home loans and 100 per cent waiver on processing fees," the release said. The bank said interest concession of up to 30 bps is also available in eight metro cities for loans up to Rs 5 crore. Customers can also apply from the ease of their home via <keyword id="6961637" type="COMPANY" weightage="20" keywordseo="yono-app">YONO App</keyword> and get additional interest concession of 5 bps, the release said. "We are pleased to improve our concessions to prospective home loan customers up to March 2021," the bank's managing director (retail and digital banking), C S Setty, said. The lender's eligible existing home loan borrowers can also avail a paperless pre-approved top-up home loan through the YONO App, he added. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/tcs-ongc-tata-power-punjab-national-bank-nhpc-and-other-top-stocks-to-watch/articleshow/80164057.cms" data-type="tilCustomLink">TCS’ market share, ONGC’s borrowing, Tata Power gets new territories⁠— these and other top stocks to watch</a> <a href="https://www.businessinsider.in/tech/news/whatsapp-is-forcing-users-to-share-personal-data-with-facebook-and-elon-musk-is-urging-people-to-switch-to-signal-a-smaller-encrypted-messaging-app/articleshow/80156317.cms" data-type="tilCustomLink">WhatsApp is forcing users to share personal data with Facebook, and Elon Musk is urging people to switch to Signal, a smaller encrypted messaging app</a>

SBI offers discounts on home loans, waives of processing fees

SBI has recently revised the interest rates on its loans which work out to the advantage of the borrowers from the largest money lender of the country. The bank’s shift to floating rate based home loans follows its obligation to comply with the latest regulatory guidelines from the RBI. Earlier this year, the Reserve Bank of India has instructed all the banks to link some of their loans to the external benchmark so that the rate cuts can reach the customers quickly. SBI’s revised home loan interest rates in comparison with those of other banks <table style="border-width: initial; border-style: none;"> <tbody><tr> <td style="width: 233.75pt; border-width: 1pt; border-style: solid; border-color: windowtext; padding: 0cm 5.4pt;"> SBI </td> <td style="width: 233.75pt; border-top: 1pt solid windowtext; border-right: 1pt solid windowtext; border-bottom: 1pt solid windowtext; border-left-width: initial; border-left-style: none; padding: 0cm 5.4pt;"> 8.15% - 8.80% p.a. </td> </tr> <tr> <td style="width: 233.75pt; border-right: 1pt solid windowtext; border-bottom: 1pt solid windowtext; border-left: 1pt solid windowtext; border-top-width: initial; border-top-style: none; padding: 0cm 5.4pt;"> HDFC Ltd </td> <td style="width: 233.75pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> 8.25% - 9.60% p.a. </td> </tr> <tr> <td style="width: 233.75pt; border-right: 1pt solid windowtext; border-bottom: 1pt solid windowtext; border-left: 1pt solid windowtext; border-top-width: initial; border-top-style: none; padding: 0cm 5.4pt;"> ICICI Bank </td> <td style="width: 233.75pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> 8.60% - 9.40% p.a. </td> </tr> <tr> <td style="width: 233.75pt; border-right: 1pt solid windowtext; border-bottom: 1pt solid windowtext; border-left: 1pt solid windowtext; border-top-width: initial; border-top-style: none; padding: 0cm 5.4pt;"> Axis Bank </td> <td style="width: 233.75pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> 8.55% - 9.40% p.a. </td> </tr> <tr> <td style="width: 233.75pt; border-right: 1pt solid windowtext; border-bottom: 1pt solid windowtext; border-left: 1pt solid windowtext; border-top-width: initial; border-top-style: none; padding: 0cm 5.4pt;"> PNB Housing Finance Ltd. </td> <td style="width: 233.75pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> 7.95% - 8.70% p.a. </td> </tr> <tr> <td style="width: 233.75pt; border-right: 1pt solid windowtext; border-bottom: 1pt solid windowtext; border-left: 1pt solid windowtext; border-top-width: initial; border-top-style: none; padding: 0cm 5.4pt;"> Karnataka Bank </td> <td style="width: 233.75pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> 8.65% - 10.25% p.a. </td> </tr> <tr> <td style="width: 233.75pt; border-right: 1pt solid windowtext; border-bottom: 1pt solid windowtext; border-left: 1pt solid windowtext; border-top-width: initial; border-top-style: none; padding: 0cm 5.4pt;"> United Bank of India </td> <td style="width: 233.75pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> 8.00%- 8.15% p.a. </td> </tr> <tr> <td style="width: 233.75pt; border-right: 1pt solid windowtext; border-bottom: 1pt solid windowtext; border-left: 1pt solid windowtext; border-top-width: initial; border-top-style: none; padding: 0cm 5.4pt;"> Vijaya Bank </td> <td style="width: 233.75pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> 8.10% - 9.10% p.a. </td> </tr> <tr> <td style="width: 233.75pt; border-right: 1pt solid windowtext; border-bottom: 1pt solid windowtext; border-left: 1pt solid windowtext; border-top-width: initial; border-top-style: none; padding: 0cm 5.4pt;"> UCO Bank </td> <td style="width: 233.75pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> 8.40% to 8.65% p.a. </td> </tr> <tr> <td style="width: 233.75pt; border-right: 1pt solid windowtext; border-bottom: 1pt solid windowtext; border-left: 1pt solid windowtext; border-top-width: initial; border-top-style: none; padding: 0cm 5.4pt;"> Citi Bank </td> <td style="width: 233.75pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> 8.05% - 9.60% p.a. </td> </tr> <tr> <td style="width: 233.75pt; border-right: 1pt solid windowtext; border-bottom: 1pt solid windowtext; border-left: 1pt solid windowtext; border-top-width: initial; border-top-style: none; padding: 0cm 5.4pt;"> HSBC Bank </td> <td style="width: 233.75pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> 8.55% - 8.65% p.a. </td> </tr> <tr> <td style="width: 233.75pt; border-right: 1pt solid windowtext; border-bottom: 1pt solid windowtext; border-left: 1pt solid windowtext; border-top-width: initial; border-top-style: none; padding: 0cm 5.4pt;"> Canara Bank </td> <td style="width: 233.75pt; border-top-width: initial; border-style: none solid solid none; border-left-width: initial; border-bottom-width: 1pt; border-bottom-color: windowtext; border-right-width: 1pt; border-right-color: windowtext; padding: 0cm 5.4pt;"> 8.05% - 10.05% p.a. </td> </tr> </tbody></table> Also Read: <a data-type="tilCustomLink">Meet World's youngest climate activist from India - Licypriya Kangujam</a> Floating based loans are linked to repo rate SBI has announced that the floating based loans given away to micro, small and medium enterprises, retail and housing segments will henceforth be linked to the repo rate, which will serve as the external benchmark. Repo rate can be described as the key interest rate applied by the Reserve Bank of India on the short-term funds given to the commercial banks in the country. Also Read: <a data-type="tilCustomLink">Mukesh Ambani's Reliance, Jet Airways and other top newsmakers on 2019</a> What does the revised interest rate system mean? Linking the loan interest rates to the repo rates will mean that repo rate will be considered as the external benchmark in a way that any key interest charged by the RBI will quickly passed on to the customers. The SBI website says that the bank will have a 2.65 percent markup over the repo rate. Earlier in August, the RBI had cut the repo rate by 35 points to 5.40 percent. Hence the external benchmark rate of the SBI will work out to 8.05 percent as per the SBI’s new regulation. Interest rates on term loans In cases of term loans for the salaried class up to Rs 30 lakhs, SBI said a premium of 15 points will be added on top of the external benchmark (EBR) rate. Hence the revised interest rate of term loans in this case will work out to 8.20 percent (8.05 percent plus 0.15 percent) as per the bank’s new interest rate system. What does the revised loan rate system bring the borrowers? SBI has now decided to switch over to floating interest rates by linking the loan rates on its loans to the repo rates. This will mean that the customers will be billed based on the latest repo rates. Whenever the repo rates fall, the customers get to save. Very rarely when the repo rates go up, the borrowers will have to bear higher bills on their borrowings. However, in most cases, the floating loan interest rates appear to be much cheaper than the fixed home loan interest rates. Know that the loan rates will also be determined by factors like your income, credit score, property’s location, loan type, tenure of the loan, loan amount, type of interest rate and the promo offers in vogue.

SBI slashes home loan rates, here's a comparison of home loan rates of all major banks in India

<ul><li>After a small jump in May by 40 basis points, <keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword> hiked the <keyword id="37018" type="General" weightage="20" keywordseo="interest-rate" source="Orion">interest rate</keyword> by another 50 basis in its bid to fight inflation.</li><li>If the RBI expects that inflation will rise beyond its tolerance limit, it hikes the rate at which banks borrow money from the central bank.</li></ul>India’s central bank <a href="https://www.businessinsider.in/finance/news/indias-central-bank-hikes-interest-rates-by-50bps-to-4-9/articleshow/92073644.cms">Reserve Bank of India raised its repo rate </a>for the second consecutive month, from 4.4% to 4.9% on Wednesday. After a small jump in May by 40 basis points, RBI hiked the interest rate by another 50 basis in its bid to fight inflation. For the month of April, the<a href="https://www.businessinsider.in/finance/news/indias-central-bank-hikes-interest-rates-by-50bps-to-4-9/articleshow/92073644.cms"> consumer price inflation</a> touched 7.8%, burning a hole in common man’s pockets. But why exactly is the Indian central bank hiking interest rates? How does it reduce the burden of expenses on common people like you and I? Let’s find out. <div type="image" title="tenor 1" msid="92120652" hostid="261" caption="&amp;lt;p&amp;gt;&amp;lt;em&amp;gt;Wondering where all your money went? &amp;lt;/em&amp;gt;Tenor&amp;lt;/p&amp;gt;"></div> What is <keyword id="43352" type="General" weightage="20" keywordseo="repo-rate" source="Orion">repo rate</keyword>? Before we dive into this, let’s understand what exactly repo rate is. Repo rate stands for ‘repurchasing option or repurchase agreement.’ It is the rate at which commercial banks and financial institutions like SBI, ICICI Bank, HDFC Bank and others borrow money from the central bank. <div type="image" title="unnamed (4)" msid="92120683" hostid="261" caption="&amp;lt;p&amp;gt;BI India&amp;lt;/p&amp;gt;"></div> Why is repo rate increased? If the RBI expects that inflation will rise beyond its tolerance limit, it hikes the rate at which banks borrow money from the central bank. Over the past three months, retail inflation numbers have remained above the RBI’s upper tolerance limit of 6%. The last time inflation was below 4% was before the global pandemic in 2019. When the repo rate increases, the cost of borrowing for banks also increases, which is passed to their account holders by increasing the interest rate on loans and deposit rates. This also makes borrowing money from the bank a costly affair, which in turn slows down investment and money supply in the market. <div type="image" title="unnamed (5)" msid="92120709" hostid="261" caption="&amp;lt;p&amp;gt;BI India&amp;lt;/p&amp;gt;"></div> As a result, it limits money supply and brings down the purchasing power of consumers, which helps in controlling inflation. The repo rate is reduced when the government intends to infuse money into the market and support economic growth, as it did during the lockdown. In fact, RBI had not increased the repo rate for nearly 4 years until last month. How a small increase in repo rate affects you A small hike in repo rate makes borrowing from the commercial banks expensive. <keyword id="6354730" type="General" weightage="20" keywordseo="home-loan" source="Orion">Home loan</keyword>, vehicle loan, education loan, personal loan, business loan, credit cards, mortgages are all influenced by the rate hike. When the borrowing cost increases, the common man is discouraged from making unnecessary purchases, thereby reducing the demand for goods and services. This kicks off a chain reaction, leading to a reduction in prices and thereby, the inflation. This is simply a game of demand and supply, with the repo rate acting as a catalyst. <div type="image" title="unnamed (6)" msid="92120758" hostid="261"></div> On the other hand, people who have savings and have a fixed deposit, for example, <a href="https://www.businessinsider.in/finance/news/why-a-rate-hike-is-not-all-bad-news-for-you-and-how-you-can-take-advantage-of-rising-interest-rates/articleshow/92029328.cms">will benefit from an increase in interest rates</a>. A poll run by <a href="https://bit.ly/3nD94g5">Stocktwits </a>shows that banking stocks might also benefit from the hike in repo rate. <div type="image" title="Poll Infographics_BI_9 June" msid="92120786" hostid="261" caption="&amp;lt;p&amp;gt;&amp;lt;em&amp;gt;How will banking stocks perform after RBI&amp;#39;s rate hike?&amp;lt;/em&amp;gt; Stocktwits&amp;lt;/p&amp;gt;"></div> Ripple effects of the hike in repo rate When borrowing business loans becomes expensive, businesses either reduce or freeze hiring, leading to unemployment. Consumers also put a pause on buying all luxury items including vehicles, which affects the auto industry. The real estate sector, which was witnessing good pickup in sales due to the low cost of financing, could be impacted by RBI’s rate hike move. As banks increase their interest rate, it will result in a further rise in equated monthly instalments (EMIs) for existing borrowers and <a href="https://www.businessinsider.in/finance/news/home-loan-rates-enter-red-zone-will-dent-affordable-and-mid-segment-sales-the-most/articleshow/92079341.cms">dent new homebuyer’s confidence.</a> Low-interest rates are unlikely to come back as the Indian government predicts that the country’s economy will take at least <a href="https://www.livemint.com/news/india/india-s-economy-to-overcome-covid-losses-in-fy35-recovery-remains-stimulus-dependent-rbi-11651238870034.html">12 years</a> to overcome the setback from Covid-19. It said that the ongoing structural changes catalysed by the pandemic can potentially alter the growth trajectory in the medium-term. Higher interest rates and inflation put the common man in a soup The war in Ukraine significantly increased the common man’s woes. It elevated commodity prices due to geopolitical tension and affected the global supply-chain, tightening financial conditions globally. As a result, due to curbs on imports and high demand for essential commodities, everything from food and beverages to clothing and accessories is expensive today. The common people of India were already struggling to manage their daily expenses with limited purchasing power on a minimum wage. Due to this soaring inflation, consumers are further losing purchasing power, which is a measure of how many goods or services you can buy with a unit of currency, at a <a href="https://www.cnbc.com/2022/05/11/how-fast-does-inflation-cut-buying-power-heres-a-simple-guide.html">faster-than-usual rate</a>. While the current repo rate of 4.9% is still not as high as the pre-pandemic level of 5.15%, the common man will feel the pinch because of higher consumer inflation. On Wednesday, the RBI raised its inflation <a href="https://www.businessinsider.in/finance/news/home-loan-rates-enter-red-zone-will-dent-affordable-and-mid-segment-sales-the-most/articleshow/92079341.cms">projection</a> for the current fiscal year to 6.7%, up from 5.7% predicted in April and 4.5% in February. If the inflation rate continues to increase despite the recent changes in repo rate, RBI will resort to hiking it again in a few months to keep inflation in check.

Explained: How RBI’s repo rate hikes affect consumers

<ul><li>State Bank of India announced a 15 basis points or 0.15% cut in its lending rates. </li><li>SBI’s one year lending rate will come down to 8.25% per annum from 8.40%. </li><li>After this cut, home loans will become cheaper by 0.35% effective from April 10, 2019. </li></ul> It looks like India’s central bank is having its way, at least with the country’s largest bank. Within hours of Reserve Bank of India (<keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword>) saying that it will ensure that banks will pass on the benefits of interest rate cuts to customers, State Bank of India announced a 15 basis points or 0.15% cut in its own lending rates. The Reserve Bank of India (RBI) today cut its repo rate or the rate at which it lends to banks —by 35 basis points. This is the fourth time the central bank cut its lending rates this year. Since February, it has effectively cut the rates by 100 basis points, but banks has been absorbing most of this benefit. They have passed on only 29 basis point benefits since February. Taking a tough stance today, RBI Governor Shaktikanta Das said, “We are willing to take whatever steps necessary to make sure banks transmit the benefits of interest rate cuts to customers.” And SBI seems to have gotten the cue. “The one year lending rate would come down to 8.25% per annum from 8.40%. This is the fourth consecutive cut in 2019-20,” the bank said. The new rates will be come into effect from August 10, 2019. After this cut, home loans will become cheaper by 0.35% effective from April 10, 2019. “In addition, SBI is offering a repo-linked home loan product with effect from July 1,” SBI said. SBI claims to have transmitted RBI’s rate cut benefits ‘fully’. It said that it has passed on the benefit of repo rate reduction by 0.85% during the current financial year to its customers with limits above ₹1 lakh. With as many as 435 million customers, SBI brings home a fourth of all the deposits made in the country. SEE ALSO <a href="https://www.businessinsider.in/business/rbi-policy-update-asks-banks-to-cut-lending-rates/articleshow/70567837.cms">RBI is pushing India's stubborn banks to cut lending rates</a> <a href="https://www.businessinsider.in/business/rbi-policy-update-asks-banks-to-cut-lending-rates/articleshow/70567837.cms">India's central bank cuts interest rate for the fourth time this year</a>

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