Borrowers shift lenders to beat high interest rates
The rate of interest may not have fallen significantly this year, but due to the difference in new and old home loan interest, the borrowers are shifting their loan from existing lenders to cheap lenders.
The State Bank of India (SBI) is offering Rs 30 lakh home loan for the new borrowers at the most low interest rate of 10 per cent. SBI has already taken over loans of Rs 300 crore with the last one and half years. Since August this year, SBI has reduced home loans interest rate twice this year.
Whereas the rest of the banks are offering a floating rate for home loans at 10 -11 per cent after the recent cuts. Earlier banks used to charge prepayment penalty of 1-2 per cent on the outstanding loans, but Reserve Bank of India (RBI) has directed to end the prepayment penalty this year.
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