RBI Policy: How will a further repo rate hike impact your EMI loans?

You should evaluate the personal loan interest rates offered by several NBFCs and banks before applying for a personal loan from a certain bank. However, while choosing to get a personal loan or a home loan, many people approach the bank where they have their main account. When you compare the interest rates of different banks, you may find that another bank gives personal loans and home loans at a much lower rate.

The Reserve Bank of India (RBI) raised the repo rate by 40 basis points to 4.40% on May 4 from 4% previously. A basis point is one hundredth of a percentage point. The repo rate was reduced in May 2020 and remained stable until the recent hike. In addition, the cash reserve ratio (CRR) was raised by 50 basis points, which put additional upward pressure on interest rates. As the increase took effect immediately, borrowers could expect higher EMIs, while FD investors should expect higher returns on new FDs.

Meanwhile, according to a Mint analyst poll, the RBI could raise the repo rate by 50 basis points and improve the cash reserve ratio (CRR) at its meeting this week to control inflation. . The central bank’s Monetary Policy Committee (MPC) will meet June 6-8.

According to five out of 10 economists polled by Mint, MPC is expected to raise the repo rate from 4.4% to 4.9%, with the rest expecting a 35-40 basis point hike to 4.75-4.8 %. Half of those surveyed expect a 25 to 50 basis point increase in CRR, the percentage of deposits that banks must hold in reserve with the RBI.

Moreover, with retail inflation reaching 7.79% in April, the government announced several measures to contain the prices of essential goods, banning or restricting exports of wheat, sugar and iron ore. Consequently, the majority of economists expect the monetary policy committee to revise its inflation forecast upwards.

The EMI for fixed rate loans, such as car and personal loans, remains the same for the entire term of the loan. Therefore, the timing of your loan application is crucial. When you take out a low-interest loan, you can keep that rate for the life of the loan, even if the general interest rate goes up.

In contrast, for mortgage borrowers, the timing of taking out the loan is less critical as they typically borrow at variable rates. Rising rates may not have a substantial impact on interest payments and EMI payments. As a result, even if you enter at a cheaper rate now, you will have to pay a higher rate later if the lender raises their interest rates.

You don’t have to worry about the repo rate if you have an existing fixed rate loan. However, if you have floating rates on an existing loan or are planning to take out a loan – fixed or variable rate, you may have to pay a higher rate if the RBI raises the repo rate further.

Present the rates of personal loans in different banks

Bank Interest rate (pa) Processing fee
Capital Aditya Birla 14% per year -26% per year Up to 2%
Axis Bank 12% per year – 21% per year At the discretion of the bank
Bank of Baroda 10.50% per year – 12.50% per year Up to 2%
Bank of India 10.35% per year – 12.35% per year Up to 2%
Bank of Maharashtra 9.45% per year – 12.80% per year Up to 1%
central bank of india 9.85% and above Up to 1%
Citibank 9.99% per year – 16.49% per year Up to 3%
city ​​union bank 12.75% per year 1.00% subject to a minimum of Rs.250
federal bank 10.49% per year – 17.99% per year Up to 3%
Fullerton India 11.99% per year – 36% per year Up to 6%
HDFC Bank 10.5% per year – 21.00% per year Up to 2.50%
Real estate loan cash loan 19% per year – 49% per year 0%-5%
HSBC Bank 9.50% per year – 15.25% per year Up to 1%
IDBI Bank 8.15% per year – 10.90% per year Contact the bank
First IDFC Bank 10.49% per year and more Up to 3.5%
IIFL 24% per year and more 2% and more
Overseas Indian Bank 9.30% per year – 10.80% per year Up to 0.50%
IndusInd Bank 10.49% per year – 31.50% per year 3% and more
J&K Bank 10.80% per year Up to Rs.500
Bank of Karnataka 12% per year – 17% per year Maximum of Rs.8,500
Karur Vysia Bank 9.40% per year – 19.00% per year 0.30% and more
Kotak Mahindra Bank 10.25% and more Up to 2.5%
National Bank of Punjab 7.90% per year Up to 1.00%
RBL Bank 14% per year – 23% per year Up to 3.5%
Bank of South India 10.60% per year – 18.10% per year Up to 2%
National Bank of India 9.60% per year – 15.65% per year Up to 1.50%
Tata Capital 10.99% and more Up to 2.75%
TurboLoan Powered by Chola 15% – 21% (fixed) per year 3.00%
Ujjivan Small Finance Bank 11.49% per year – 16.49% per year At the discretion of the bank
Yes Bank From 10.99% per year – 16.99% per year At the discretion of the bank Up to 2.50%

Source: Bank Bazaar

Present the mortgage rates in different banks

Financial Avails 8.00% 1.00%
Aditya Birla 9.00% 1%
Axis Bank 6.90% Rs. 10,000
Bandhan Bank 6.40% -13.50% 1% (Rs.5,000)
Bank of Baroda 6.90% to 8.25% Contact the bank for more information
Bank of India 6.90%
Bank of Maharashtra 6.80% Rs. 10,000
Canara Bank 7.05% per year to 9.30% per year 0.50% of the loan amount subject to a minimum of Rs. 1,500, and a maximum of Rs. 10,000
central bank of india 6.85% Rs. 20,000
Citibank 6.75% Rs. 10,000
DBS Bank 7.30% 0.25% (10,000 rupees)
Dhanlaxmi Bank 7.85% Rs. 10,000
Housing finance dhfl 8.75% Rs.2500
federal bank 7.65% Rs. 3,000 rupees. 7,500
GIC Housing Finance 7.45% Rs. 2,500
HDFC LTD 7.00%* Rs. 3,000 rupees. 5,000 (plus tax)*
HSBC Bank 6.45% 1% (10,000 rupees)
Hudco home loan 9.45% N / A
IDBI Bank 6.75% 0.50% (2,500 rupees – 5,000 rupees)
First IDFC Bank 6.50% Rs. 5,000 rupees. 5,000
IIFL 10.50% 1.25%
Housing Finance in India 12.00% 2.00%
Indebulls 7.60% 0.50% and more
Overseas Indian Bank 7.05% 0.50% (Max Rs. 20,000)
Bank of Jammu and Kashmir 7.20% Rs.500 Rs.10,000
Bank of Karnataka 7.50% Rs.250
Karur Vysia Bank 7.20% Rs.5,000
Kotak Mahindra Bank 7.00% per annum to 7.60% per annum 0.50%
LIC Housing Finance 6.90% Rs. 10,000 -Rs. 15,000
GNP housing finance 6.99% Up to 0.50%
Bank of Punjab and Sindh 6.85% Full Waiver
National Bank of Punjab 6.50% 0.35% (Max Rs. 15,000)
Reliance real estate financing 9.75% Rs. 3,000 rupees. 6,500
Saraswat Bank Home Loan 6.70% None
Sriram housing 8.90% N / A
Bank of South India 7.85% 0.50% (Rs. 5,000 – Rs. 10,000)
Standard Chartered Bank 7.99% 1%
National Bank of India 7.05% per year -10.85% per year 0.35% and more
Sundaram Real Estate Finance 6.95% Rs.3,000 (for employees)
Commercial Bank of Tamilnad 8.25% Rs. 15,000
Tata Capital 6.90% 0.50%
UCO Bank 6.50% 0.15% (Rs. 1,500 – Rs. 15,000)
Union Bank of India 6.90%
United Bank of India 8.00% 0.59% (1,180 rupees – 11,800 rupees)
Yes Bank 8.95% 1% (10,000 rupees)

Source: Bank Bazaar

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