RBI did not reduce the interest rate, but there is still a chance for homebuyers to save! Know how to reduce home loan EMI..

This time, home loan borrowers were expecting some new relief from the Reserve Bank (RBI), but it did not happen. RBI has kept the repo rate (RBI Repo Rate) stable at 5.5% in the August monetary policy meeting. This means that now there will be no change in home loan EMIs for the time being.

Earlier, the RBI had cut the interest rate by a total of 100 basis points in three consecutive policy meetings this year, but this time, Governor Sanjay Malhotra said that the effect of the previous cut is still being seen. Therefore, it was decided to keep the interest rates unchanged for the time being. (Home Loan Interest Rates)

Will your EMI increase or decrease?

The direct meaning of the repo rate not decreasing is that banks will also not make any immediate changes in their interest rates. This means that those who were thinking that the EMI would be reduced further may have to wait a little longer. However, not getting relief in EMI does not mean that you cannot do anything.

If your home loan is still running at a high interest rate, then the balance transfer option can be of great benefit to you.

How will a balance transfer lead to huge savings?

Suppose you have taken a home loan of Rs 40 lakh for 20 years and are paying 9% interest on it. If you transfer it to a bank that is giving loans at the rate of 7.75%, then your EMI can be reduced by about Rs 3,151, and you can get a total interest saving of about Rs 7.56 lakh.

At present, many banks are giving loans at low interest rates to customers with good credit scores through balance transfer. In such a situation, if you are still paying for expensive loans, then this can be the right opportunity for you.

Which banks are giving cheap home loans?
Now, talking about the current home loan rates, government banks are still giving cheaper loans than private banks. If you are thinking of taking a home loan, then here we are telling you about the current home loan interest rate of some major banks.

You will get the cheapest loan from a government bank.

Canara Bank and Union Bank of India are charging a 7.30% interest rate on home loans. This rate is 7.45% in Bank of Baroda, 7.50% in State Bank of India (SBI), and 7.55% in Punjab National Bank.

On the other hand, if we talk about private banks, the rate of ICICI Bank is 7.70% or more, HDFC Bank has 7.90%, Kotak Mahindra Bank has 7.99% or more, Axis Bank has 8.35% and Yes Bank has this rate going up to 9.00%.

As you can see, the rates of private banks are higher, while government banks are offering cheaper loans. Therefore, before taking a loan, definitely compare the rates of different banks.

Not just home loans, other loans will also be affected
The impact of the repo rate remaining stable will not only be on home loans, but there is also no possibility of any change in the rates of auto loans, personal loans, and MSME loans for the time being. The strategy of banks is now of 'selective lending' - that is, customers who have a good credit score are being given loans at a lower interest rate.

Do these things before taking a loan
If you want to reduce EMI, then definitely consider a balance transfer.

Compare the interest rates of different banks.

Keep a good credit score, so that you can get a loan at a lower interest rate.

If you are thinking of taking a new loan, then give priority to government banks.

If you are also troubled by the EMI of home loan, then you can save lakhs of rupees by managing the loan in these smart ways.

Disclaimer: This content has been sourced and edited from Amar Ujala. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.