Home Loan Rates Cut: After the RBI has slashed the rates, many banks have gone ahead and slashed their RLLR. This is a bonanza for customers taking home loans. New home loans will become cheaper, and EMI payments of existing customers may fall. Customers may even opt to reduce their home loan tenure rather than see a decrease in their EMI.
The Reserve bank that had slashed the repo rate recently saw interest rates being reduced on home loans by the 6 largest banks in the country. This consists of bank giants like Canara Bank, Punjab National Bank, Union Bank of India, and Bank of Baroda. They cut the Repo Linked Lending Rate (RLLR) by up to 0.25 percent.
What Is This RLLR?
RLLR which is Repo Linked Lending Rate is the rate at which banks extend a loan to the customer. It is directly linked to the repo rate of the RBI. The interest rate goes down or up for the customer as per the changes in the RBI’s repo rate for those customers who choose RLLR-linked home loans. In home loans, most customers prefer floating rates, which are generally linked to RLLR. Once an RLLR has been cut down by banks, they will offer the choice to the customer to either reduce the EMI or reduce the period of the loan.
Which Banks Reduced The Interest Rate On Loans?
After the repo rate cut by the Reserve Bank of India (RBI), six major banks have slashed home loan interest rates. Let us see which banks fit in and what their revised rates are:
- Canara Bank: The RLLR of Canara Bank has been cut from 9.25 percent to 9.00 percent. The new rate will come into effect on February 12, 2025. This concession applies only to accounts opened after February 12, 2025.
- Bank Of Baroda: The Bank has reduced its repo linked lending rate (RLLR) to 8.90 percent. This new rate becomes effective on February 10, 2025, to the immediate benefit of the bank’s existing and new customers.
- Bank Of India: Bank of India cut its repo linked lending rate (RLLR) down from 9.35 percent to 9.10 percent. This new interest rate is in effect on and after 7 February 2025, benefiting the EMI of both old and new customers.
- Union Bank Of India:The RLLR of Union Bank of India has been cut from 9.25 percent to 9.00 percent, effective February 11, 2025. The decision will benefit new home loan borrowers with reduced interest charge.
- Indian Overseas Bank: With this last revision, the Indian Overseas Bank reduced its RLLR rate by 25 basis points, from 9.35 percent to 9.10 percent, effective February 11, 2025.
- Punjab National Bank (PNB): PNB goes ahead with the reduction of its RLLR from 9.25 percent to 9.00 percent, effective February 10, 2025, thus ensuring cheaper home loan facilities for its customers.
What Would Be The Gain For Home Loan Customers?
Banks’ RLLR cuts benefit home loan customers. The new home loans will become cheaper for them, and the EMIs for many existing customers may decrease. If the customers wish, they can keep the EMIs the same but reduce their loans’ tenure. This way, they will pay less interest.
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