If you have taken a loan from HDFC bank for your home, or planning to avail one, this must come as good news. The bank has announced a 10-basis points reduction in interest rates. The reduction will be applicable for loans already in existence as well as those to be disbursed. This reduction has become effective since July 31. There is an additional 5 basis points benefit to women borrowers.
The loans under different categories or end purposes are placed in three distinct slabs as far as the interest rates are concerned. These are loans up to Rs 30 lakh; loans between Rs 30 lakh and Rs 75 lakh and the third above Rs 75 lakh.
For the first category of sub-30 lakhs loans, the borrowers will now pay an interest of 8.6%. Female borrowers however need to pay only 8.55%, 0.5% less. Similarly, for the next two higher slabs, the rates are 8.85% and 8.9% respectively. Here again, women borrowers of amounts from Rs 30 lakh to Rs 75 lakh will pay 8.80% and if they borrow more than Rs 75 lakh, the concessional rate of interest is 8.85%.
HDFC Bank has sweetened the deal by extending this interest rate reduction to existing borrowers as well.
HDFC Bank is not alone in coming up with interest rate concessions on loans. The largest public sector bank State Bank of India had made a similar announcement in early July bringing down the rates of interest on loans of different tenors by 5 basis points.
The Reserve Bank of India had been steadily announcing rate cuts totalling 75 basis points and the regulator has been advising individual banks to pass on the benefits to their respective borrowers. Some of the other banks that have responded to RBIâ€™s call and reduced the rates of interest on their loan products include Bank of Maharashtra, Corporation Bank, Oriental Bank of Commerce and IDBI Bank.