Will Get Relief in EMI: Banks Start Reducing Interest Rates
Banks have started reducing interest rates on loans, ranging from home loans to personal loans and car loans. This development comes after the Reserve Bank of India (RBI) kept the repo rate constant since its April meeting. The reduction in interest rates comes as a relief for borrowers, as it can lighten the EMI burden on their existing loans.
External Benchmark (BPLR) Linked to Repo Rate
It is important to note that the interest rates on loans are linked to the external benchmark, Benchmark Prime Lending Rate (BPLR), which is based on the repo rate. Therefore, when the repo rate decreases, banks reduce the interest rate on loans.
RBI’s Softening Attitude
The RBI has recently adopted a softer stance, indicating that the interest rates may decrease in the future. This is good news for borrowers who have been struggling to repay their loans due to the high EMIs.
Impact on the Borrowers
The reduction in interest rates will benefit borrowers in the following ways:
– Lower EMI burden: As the interest rates decrease, the EMI burden on existing loans will reduce. This will provide some relief to borrowers who have been struggling to make ends meet.
– Lower interest rates on new loans: The reduction in interest rates will also benefit those who are planning to take a new loan. They will get the loan at a lower interest rate, which will reduce the overall cost of borrowing.
Conclusion
The reduction in interest rates on loans comes as a relief for borrowers who have been struggling to repay their loans due to high EMIs. With the RBI’s softer stance, it is expected that the interest rates will continue to decrease in the future. This will benefit both existing borrowers and those who are planning to take a new loan.
Follow DelhiBreakings on Google News
Superfast News Coverage by DelhiBreakings.com team.
For Superfast national news and Delhi Breaking Stories visit us daily at https://delhibreakings.com