RBI has announced the first monetary policies of the current financial year. According to this, those who have taken home loan and car loan at flexible interest rate, their EMI will not be affected much.
RBI today (April 8) announced the first monetary policies of the current financial year 2022-23. According to this, those who have taken home loan and car loan at flexible interest rate, their EMI will not be affected much as RBI has kept key policy rates stable. The repo rate is at 4 per cent while the reverse repo rate is at 3.35 per cent. Most of the banks are currently providing home loans at a minimum rate of 6.5 percent. In such a situation, for those who want to take a home loan, this is a better time for them because its rates are currently at the low level of many years and experts are also expecting it to increase in the current financial year. RBI has kept its monetary policies liberal for now but there are signs of toughness in it.
Keeping the repo rate low will increase the housing demand
According to Ramani Shastri, Chairman and MD, Sterling Developers Private Limited, this decision of RBI has increased the confidence of home buyers. According to Shastri, keeping the interest rate low has helped the real estate sector to revive as it has become cheaper to fulfill one’s dream and housing demand has increased. Keeping the policy rates stable by the RBI will sustain the prevailing environment and will accelerate the overall economy recovery.
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how much benefit
Even a reduction of 100 basis points ie 1 percent in rates saves you lakhs of rupees on interest. However, how much will be saved, it depends on how much time is left to repay the loan. For example, suppose you have taken a loan of Rs 40 lakh for 15 years, then if your loan rates are reduced by 2 per cent, then a total of Rs 8.5 lakh will be saved on interest and Rs 57 thousand annually in EMI. Will be.
Which loan will be affected first by the change in repo rate
When RBI increases the repo rate, the loan whose EMI is made according to the Repo Rate Linked Rate (RLLR), has an immediate effect. On the other hand, loans linked to MCLR also show an effect but slower than RLLR. When the cost of funds for banks increases, the MCLR of the bank also goes up. Those who have taken a loan before October 1, 2019, can continue to EMI on their loan at the fixed lending rate based on marginal cost or switch to RLLR but before doing so, check the cost-benefit. Do make an assessment. Also, a few months should be stopped before the switch takes place to get a clear picture of the interest rate movement.
(Article: Sunil Dhawan)
