Cheapest Home Loan: The central bank RBI has kept the repo rate stable at a low of 4 per cent for the last one year. Due to this many banks have reduced the interest rates on fixed deposits (FDs), due to which the investor’s interest towards FD has faded. However, due to the low repo rate, many banks have reduced the floating home loan interest rate so much that it has reached a decade low. Talking about two years ago, in October 2019, central banks had issued instructions to externally benchmark loans. Earlier in September 2019, the lowest rate of home loan was 8.40 per cent whereas today it is less than 7 per cent. At present, there are at least 15 such banks which are offering home loans at the rate of less than 7 per cent. So, if you are planning to buy a home, you have the required margin funds, a credit score of more than 750 and EMI repayment capability, according to BankBazaar, this is the best time to fulfill your dream home.
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Keep in mind to get the old loan repo-linked
Lower home loan rates have provided a better opportunity for those who had taken a loan at MCLR or before October 2019 (base lending rate regimes) to refinance their loan. This means they can refinance their loan to a repo-linked loan and avail huge interest relief while taking advantage of lower rates. Borrowers can go to their bank to get their loans repo linked or go to other banks to get their loan refinanced. However, in this process, calculations must be done regarding the saving of refinancing cost and interest. One more thing should be kept in mind that whenever RBI increases the repo rate in repo-linked loans, the EMI of the loan will also increase. Apart from this, there is also a risk associated with the customer in this type of loan i.e. if the credit score declines during the loan tenure, the interest rate and EMI amount may increase.
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These 15 banks are offering home loans at the lowest rates
If you are planning to take a home loan of less than Rs 30 lakh, then below is a list of 15 government and private banks that are offering home loans at the cheapest rates. Keep in mind here that the rate of interest on home loan depends on your age, income, gender, credit score, loan amount, loan to value ratio (LTV ratio) or other terms and conditions.
Disclaimer: This data has been compiled by online marketplace bankbazaar.com for loans, credit cards etc. The range of interest rates given here is based on the credit score on the amount below 30 lakhs. All these data have been taken from the respective banks’ website as on 2 July 2021.)
(Article: Sanjeev Sinha)