Reserve Bank of India announced that Repo Rate under the liquidity adjustment facility (LAF) is cut by 75 basis points to 4.40% from 5.15 %. The reduction will come into effect immediately. The RBI has, however, kept the cash reserve ratio of scheduled banks unchanged at 4 per cent of net demand and time liabilities.
Latest Update as on 27 March 2020: No EMI’s for 3 Months as per RBI. No impact on CIBIL Score so your credit report will not take hit also but of you don’t pay interest will increase.
The Effect on Home loans
The rates for new customers should fall by .75% for new customers immediately.
So expect rates to come down to 7.15% and rates will be finally will be under single digit.
Expect these rate cuts for existing customers too.
So anybody running Home loan of 20 lakh @ 7.90 % can expect an EMI Reduction from 19300 to 18970 and saving of Rs 330 per month as his new rates may fall down to 7.15%.
The Effect On Car loans:
Car loan rates are between 8.50% – 10.25%.
The rate cut by RBI may push Banks by reducing rates to 8.50% .
But these rate cuts are only favorable to fore new car loan seekers as Car loans are mostly on fixed rates.
The effect On Personal loans:
The Personal loan market depends majorly on liquidity of Banks and the rates are between 11%- 25%.
With these rate cuts we don’t expect much movement on rates getting lower very soon as in March there is liquidity issue at Banks.