With hike in benchmark prime lending rates by many banks, home, auto, education and personal loan rates have seen a rise for many banks. The rate hike comes following the policy rate hike by Reserve Bank of India in the monetary policy review.
It is expected by analysts that the policy rates are going to see another hike in the next quarterly review of monetary policy scheduled in September.
Banks have moved to the base rate system of lending thereby leaving behind the BPLR system. In order to push customers to move towards the base rate system, banks have hiked BPLR rates thereby making loans costlier.
Personal loans already bear high rates of interest. The news of rate hike has become a cause of worry for borrowers especially the ones who have taken the loan in floating form as rates have further gone up for them.