Banks Hikes lending rates, your EMIs to go up too
A week after the credit policy, the quarter percent rate hike is beginning to seep in. HDFC has raised its home loan rates for existing and new customers by a quarter percent. HDFC was not alone in raising rates. Other public sector undertaking (PSU) banks like Bank of India and Indian Overseas Bank have also raised their base rates and prime lending rates today. CNBC-TV18’s Gopika Gopakumar reports more about the impact on EMIs.
Loans will become more expensive as banks and housing finance companies have decided to follow RBIs cues. The largest housing finance major, HDFC, has hiked lending rates for both old and new customers by 25 basis points.
This means, for a customer who is availing Rs 30 lakh loan for a period of 20 years, has to pay an interest rate of 9.75% and an EMI of over Rs 28,000 per month. For Rs 75 lakh loan, which is priced at 10%, the EMI is priced at over Rs 72,000. So additionally, customers will have to chip in Rs 540 per month as part of their EMIs.
It is not just HDFC alone. Other public sector banks have decided to hike their base rate as well as benchmark prime lending rate (BPLR). This means, both old and new customers will have to pay higher EMIs. For public sector banks, all the loans that include corporate loans, auto loans, personal loan and loans linked to base rate will become more expensive.
Two banks, PNB and Bank of Baroda, have hiked their deposit rates. This is a result of garnering more deposits. Recently, deposit growth has become sluggish and that’s why most banks are raising deposit rates, in order to support a higher credit growth.
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