NEWS & ADVICE : HOME LOANS
Should interest rate only be considered in choosing a home loan?
By Joseph Samson
Print    Email    RSS   

Rising interest rates have been one of the biggest concerns worrying the borrower in present times. Continuous hike in policy rates by Reserve Bank of India and corresponding rise in interest rates of loans has been showering its adversity especially on the home loan borrower for whom the repayment tenor is already large and rise in equated monthly installments (EMIs) add up to the crunch.

But is interest rate the only factor guarding the selection of a home loan? Not necessarily so. In this scenario when the borrower feels fragile and finds himself succumbing under market pressure, lenders try to allure him by offering attractive loan rates which seem to be providing a cover against market fluctuations.

ICICI Bank and HDFC Ltd. recently came with fixed-cum-floating rate home loan schemes. While ICICI Bank's scheme offered fixed rate loans for the 1st or 2nd year followed by floating rate thereafter, HDFC's scheme had an increased fixed tenor of either 3 years or 5 years. Interest rates being offered by both institutions have marginal difference.

Similarly State Bank of India declared to continue with a 25bps concession on home loan rates till the end of this year and private sector lender Axis Bank came up with a fixed rate loan scheme for the entire tenor of the loan without any floating component attached to it.

Thus the choices offered by lenders appear very much similar thereby making it difficult to make a selection for the most appropriate lender. The borrower thus has to look into some other factors too before making a decision.

Lending history of the financial institution: By lending history of the bank/housing finance company (HFC) it is meant that the borrower is advised to check up the lending tendency of the bank, that is how the bank has reacted to policy rate changes in the past. PLR or prime lending rate of banks has a direct dependency on policy rates (repo and reverse repo).


Page  | 123 |  
(Comments Posted : 0) Post Your Comments
Show All Comments
COMPARE QUICKLY
 Select a product:
 

CALCULATE QUICKLY
 Select a product:
 

EDITORS' PICKS
Bankers concerned on RBI loan recovery...
How to increase one’s Home Loan Eligibility
Your EMIs may help you to reduce your tax...
NRI Home Loan: A friend for the non-residents
Manage your loans, avoid recovery agents


Bangalore ℂall ℊiℝls 8884081673 pankaj ℂall...
Bangalore ℂall ℊiℝls 8884081673 pankaj ℂall...
Bangalore ℂall ℊiℝls 8884081673 pankaj ℂall...
PINJORE: CaℒL Giℛℒs In PiNjOrE 09915787550...
PINJORE: CaℒL Giℛℒ In PiNjOrE 09915787550...
how to gate my home loan certificate

NEWS THIS WEEK
Canara Bank earned a profit of 60%. Feb 6, 2015
New Branch of Laxmi Vilas bank at Vijayawada Jan 30, 2015
Home loan EMIs expected to drop down Jan 21, 2015
Corporation Bank received MSME banking excellence award 2014 Jan 19, 2015
Home loan rates set to fall, after reduction in repo rate Jan 16, 2015
News Archive