Following the interest rate cuts by many banks, LIC Housing Finance also announced the interest rate cut on home loan by 25 basis points. Banks and financial institutions are lowering such interest rates following the recent policy move by the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI). LIC will now offer loans to its customers at a starting rate of 8%, effective from April 24.
Meanwhile, public sector bank (PSB) Canara Bank has also cut interest rates on home and auto loans. The bank announced that its customers will home loans at the starting of 7.90% and auto loans from 8.20%.
Prior to this, Indian Bank has cut down its interest rates on home and vehicle loans following the recent policy move by the MPC of the RBI. Indian bank has cut down interest rates on home loan from the existing 8.15% p.a. to 7.90% p.a, and interest rates on vehicle loan were cut down from the existing 8.50% to 8.25% p.a.
Alongside with many other banks and financial institutions, India’s largest PSB State Bank of India (SBI) had announced a reduction in its lending rate by 25 basis points. With this, the bank brought its Repo Linked Lending Rate (RLLR) to 8.25%, making home, personal and automobile loans cheaper for both existing and new borrowers.
Furthermore, SBI has lowered its External Benchmark-Based Lending Rate (EBLR) by 0.25% to 8.65%, as well.
Revised EMI On Rs 60 Lakh Home Loan
After the LIC Housing Finance reduced its loan rates by 25 basis points, home loans are set to become cheaper. For instance, if an individual took floating rate home loan of Rs 60 lakh at 10% interest rate for 20 years, his/her monthly EMI will become cheaper nearly Rs 1,000.
If an individual was paying the monthly EMI of Rs 57,901.30 at 10% interest rate, earlier, he/she will now pay the monthly EMI of Rs 56,911.01 at 9.75% interest rate. This translates into a monthly benefit of Rs 990.29.
RBI MPC
The RBI has announced its first monetary policy of Fiscal Year (FY) 2025-26 on April 9. The RBI has reduced the benchmark repo rate by 25 basis points (bps) to 6.00% from 6.25%. This decision was taken unanimously by the MPC. This is the second consecutive rate cut, with the last reduction done in February, this year. Moreover, the marginal standing facility rate stands at 6.25% as of now.
Furthermore, the MPC decided to change its policy stance from “neutral” to “accommodative”.
