With the audience being, banks, corporates and the aam janta, everyone applauded in unison as the RBI cut lending rates by 50 bps, signalling loans were set to become cheaper.
With the audience being, banks, corporates and the aam janta, everyone applauded in unison as the RBI cut lending rates by 50 bps, signalling loans were set to become cheaper. The repo rate which was left untouched at 7.25% in the August monetary policy has now been reduced to 6.75%. Considering all the reductions which happened since the beginning of this fiscal year the repo rate has seen a cumulative drop of 1.25%. Here is a 5-point action plan for you:
1. Lookout for revised loan rates announcements!
If you have been thinking about approaching a bank for a home loan, then wait for just a little more time because loan rates are going to see a correction soon – many of the top banks have already announced a cut. However, as was clear yesterday, SBI’s 40 bps cut, effectively translated into just 20 bps. So, cap the euphoria, but use this forthcoming short period of time until more announcement for additional property search, preparing for the documentation and drawing plans for repayment.
2. Those with home loans running?
Considering the competition in the home loan market, most banks are expected to pass on the benefits to their existing customers. You must meet your bank after the revised rates are announced to check on the benefits offered to existing customers. In case, your bank is not passing on the benefits to existing clients then check on the loan transfer policy of the banks which have reduced lending rates.
3. Time for an investment review
Deposit rate cuts will follow suit, owing to reduction in policy rates. Savings bank account rate and deposit rates will decrease, thus impacting your yield. This is a good time to review investments and diversify for better return on investment. Explore alternative investment opportunities like equity markets, mutual funds, etc.
4. A shiny new car on mind this festive season!
The RBI rate cut will likely lower overall lending rates and that will make car loans cheaper too. If you have been dreaming of a swanky new ride, well now is the time to go in for the purchase. That coupled with the upcoming festive season will be an ideal time to make the purchase. Lookout for discount offers and festive season car sales!
5. Savings boost
Good things come to those who wait. If you are in the parsimonious club, then you must have been saving as much of your salary as you can. And, now has come the time for you to reap the rewards as you will be the one forking up the initial downpayments with aplomb, rather than scrambling to get the sums together. Time to say cheers!