Winning Bizness Desk
Mumbai. After RBI recently increased the repo rate by 0.50%, banks have started increasing the home loan interest rate. Taking loan from HDFC Bank has become expensive from Tuesday as it has increased the loan interest rates by 0.25%. According to the official site of the bank, now you will have to pay 7.70% annual interest on loans up to Rs 30 lakh. That is, now the home loan has become expensive and you will have to pay more EMI. Apart from this, other banks are also preparing to increase the interest rate.
What bank said ?
“HDFC increases its Retail Prime Lending Rate (RPLR) on Housing loans, on which its adjustable-rate home loans (ARHL) are benchmarked, by 25 basis points, with effect from August 9, 2022," the mortgage lender said in a statement.
What does an RPLR hike mean?
Retail Prime Lending Rate is the rate at which housing finance companies give loans to their customers on the basis of their creditworthiness. When lenders give out their loans to customers, RPLR is considered the benchmark against those rates. Thus, an increase in RPLR will result in higher EMIs paid by home loan borrowers.
With the increase in interest rate, not only new but already running loans will also become expensive. Those who have already taken a loan, their EMI can also increase. Increasing the amount of EMI can spoil the budget of many people's houses. There are three options that can save your budget from spoiling. These are refinance, making Pre-Payment and extending the tenure of the loan. Third one is the best option. In such a situation, if you are not able to get extra income or savings, then you can reduce the EMI by increasing the tenure of the loan.