Home loans become cheaper after RBI’s repo rate cut boost:RoI starts from 7.10% with Bank of Maharashtra; check out latest rates of other banks

The recent 0.25% cut in RBI’s repo rate has started showing its effect. 6 major banks have reduced home loan interest rates by up to 0.25%. These include HDFC Bank, Punjab National Bank, Bank of Baroda, Indian Bank, Bank of India and Bank of Maharashtra. Due to the new reduction, the annual interest rate on home loans has come down to as low as 7.10%. RBI reduced the repo rate from 5.50% to 5.25% on December 5. This has reduced the funding cost for banks. They are passing on this benefit to their customers by making loans cheaper. Interest rate depends on several factors including credit score
The home loan interest rate you get depends on factors like your credit score, loan-to-value ratio, loan amount and tenure. For example, if the bank’s home loan interest rate for you was 8% earlier, it will become 7.75% after a 0.25% reduction. After the reduction, the EMI on a 20-year loan of ₹20 lakh will decrease by up to ₹310. Similarly, the EMI on a ₹30 lakh loan will decrease by up to ₹465. Both new and existing customers will benefit from this. How will a reduction in interest rates affect EMI and total loan cost? Loan Amount: ₹20 lakh How much benefit? Interest reduced by: 0.25% EMI savings: ₹310 Total interest savings: ₹74,000 Loan Amount: ₹30 lakh How much benefit? Interest reduced by: 0.25% EMI savings: ₹465 Total interest savings: ₹1.12 lakh Note: These calculations are based on estimates Keep these 3 things in mind while taking a home loan 1. Make sure to get information about pre-payment penalty
Many banks charge a penalty for early loan repayment. In such cases, get complete details about this from banks, because early loan repayment results in less interest than expected for banks. In such cases, they impose certain terms and conditions. Therefore, obtain full information about this while taking a home loan. 2. Take care of your credit score
Credit score shows a person’s credit history. Banks always check the applicant’s credit score in case of personal loans. Credit score is determined by various specialized credit profiling companies. It examines whether you have taken a loan before or how you have used credit cards etc. A person’s credit score is determined by repayment history, credit utilization ratio, existing loans and timely payment of bills. This score ranges from 300-900, but lenders consider a score of 700 or above as good. 3. Check out other offers too
Banks keep providing better offers to borrowers from time to time. In such cases, find out about offers from all banks before taking a loan. Because taking a loan in haste can prove wrong for you. Thoroughly investigate before taking a loan. ​