Interest rate on Hudco Niwas to be cut

Rakesh Sood

New Delhi, Oct 30: Taking cue from Housing Development Finance Corporation (HDFC), the Housing and Urban Development Corporation (Hudco) has made up its mind to slash interest rate on its prestigeous Hudco Niwas scheme for individual customers.

The interest rate on its retail lending scheme may be reduced by 0.5-1 percentage point, the sources in the state-owned corporation told The Financial Express.

The decision in this regard would be taken at the Hudco board meeting on Wednesday, which is expected to clear an across-the-board reduction in interest rates, the sources maintained.

The board had sought to announce a rate cut last week just after the announcement of the credit policy by RBI but postponed its decision in order to consider the exact quantum of the reduction for its retail lending scheme keeping in view the cut in the lending rates by other housing finance companies such as HDFC and Maharishi Housing Development Finance Corporation, insiders said.

“Our popular personal housing scheme, Hudco Niwas will now carry a lower interest burden which is expected to make it more popular,” said a senior official with the corporation on condition of annonymity.
With this, it is expected that housing loans of below Rs 50,000 would now see a cut of 0.5 per cent from the earlier 11.5 per cent. u u For loans up to Rs 2 lakh, the new rate of interest is expected to be 11.5 per cent agianst the exiting 12 per cent, while for the quantum above Rs 2 lakh, the interest is expected to witness a cut of one percentage point.