There is important news for home loan and car loan borrowers. The hope of loan becoming cheaper is over due to non-change in the key interest rates of RBI. According to the central bank RBI, the repo rate has been kept constant at 4 percent.
There is important news for home loan and car loan borrowers. The hope of loan becoming cheaper is over due to non-change in the key interest rates of RBI. According to the central bank RBI, the repo rate has been kept constant at 4 percent. The reverse repo rate will also remain unchanged at 3.35 per cent.
When RBI reduces the repo rate, the loan becomes cheaper. While increasing it makes the loan costlier. According to CA Arvind Dubey, it is fortunate that RBI has kept the key interest rates unchanged. Due to this, the chances of the loan becoming expensive are less. RBI reviews the repo rate every two months. Repo rate is the rate at which banks borrow from RBI. Generally, the loan rate of banks depends on the repo rate.
Big opportunity for banks
According to personal finance expert and CA Manish Kumar Gupta, RBI has given banks an opportunity to increase their liquidity by further reducing FD rates by not making any change in key interest rates. Because due to the covid mahamari, most people are insisting on getting fixed deposits. This FD is not saving but in the name of Emergency Fund. With this, the FD application is automatically coming to the banks. Banks can pass on the benefit of this liquidity to the MSME industry. They can reduce the rate of home loan and business loan so that the Modi government’s campaign to boost MSME and real estate sector goes ahead.
Banks are continuously cutting their MCLR
However, government banks are continuously cutting their MCLR, due to which the rates of home and car loans have become cheaper. For example, Punjab National Bank (PNB) has recently cut MCLR. It has reduced the one-year marginal cost lending rate (MCLR) by 0.05 percent to 7.30 percent. The bank said that the interest rate is effective from June 1, 2021. The MCLR has been cut by 0.10 percent for a period of six months and three months and the interest rate after this cut will be 7 percent and 6.80 percent respectively. There has been no change in the MCLR for one day, one month and three years.
Canara Bank revised interest rate
On the other hand, Canara Bank has revised the MCLR and Repo Linked Lending Rate (RLLR). The new rates are applicable from May 2021. According to the bank, the RLLR on home loan is 6.90 percent for women and 6.95 percent for others. The rate of loan used for agricultural work including four wheelers is 7.35 percent and for two wheelers it is 9.05 percent. This loan ranges from 6.90 per cent to 8.90 per cent under different schemes for education.