How a Home Loan Interest Cut Can Save You Some Serious Money
Home Loans are undoubtedly popular in India, where millions dream of owning their houses. In such a scenario, you can be sure that there are plenty of lenders in the country who’re willing to give out Home Loans. Recently, many lenders reduced their interest rates, leading many borrowers to wonder how this move would affect their repayment schedules.
Below are a couple of pointers for those who are curious to know how a Home Loan interest cut benefits consumers.
RBI Cuts Interest Rate, Lenders Rejoice
In January 2015, RBI reduced the repo rate by 25 basis points. The repo rate is the rate at which banks borrow money from RBI. The repurchase rate, as it’s known, indirectly affects the interest rates on any kind of loans that banks offer to their customers. The more the repo rate, the higher the amount that banks need to pay in order to procure short-term funding. And a reduction in the repo rate enables banks and financial companies to cut the interest rates on the loans they give out.The rate cut by RBI led to rate cuts by banks all over the country.
You may already be wondering about the benefits of falling interest rates. Here are a few.
Interest Rate Cut Impact
Various lenders are still in the process of slashing housing loan interest rates by 25 basis points. This rate cut will result in lower EMI amounts for borrowers. For instance, those who have borrowed a loan of INR 50 lakh with a tenure of 20 years will now need to pay EMIs that are cheaper by INR 839 per month. This is how Home Loan interest cut benefits consumers.
Most of the times lenders do not pass on the benefit of rate deduction to existing customers. In such a scenario, a Balance Transfer would be the smartest option as not only does your EMIs reduce, you also get an option of reducing your Home Loan tenure. Let’s see how a balance Transfer affects your loan tenure and EMI.
Savings on EMI
Say you’ve taken a Home Loan for Rs. 50 lacs at a rate of 10.50%, with a tenure of 20 years. Your EMI per month would be Rs. 49,919. You have made payments amounting to Rs. 8,28,750 for the first 3 years, and your remaining loan balance would be Rs. 46,96,250.
Now if you do a balance transfer with Bajaj Finserv at an ROI of 9.85%, then your monthly EMI would be about Rs. 47,552. Hence, for the remaining tenure of 17 months you would be saving up to Rs. 4,82,868.
If you’re looking to take a Home Loan because of the reduced interest rates, then Bajaj Finserv would prove to be the smartest choice. In addition to offering Home Loans at the lowest interest rate in the country and quick disbursals, Bajaj Finserv also provides additional options like – Home Loan +, Refinance, Part Prepayment facility, Nil Foreclosure charges, Online Account Access, Customised Insurance Schemes, Group Credit Protection Plus from Bajaj Allianz, Bajaj Allianz SFSP Policy and Star Health Package Policy. Furthermore, there are zero prepayment charges involved if you decide to foreclose your Home Loan.
Rake in the benefits from Home Loan interest rate cut at the earliest. Apply online for Home Loan at Bajaj Finserv’s website to get quick approval and quotation today.