RBI on Tuesday cut key policy rate by 0.25 per cent to 6.5 per cent. A short take on how a matching 25 basis points cut in lending rate by banks would ease impact repayment burden of borrowers.
Radius Developers is now building 350 sq ft carpet area studio apartments at less than Rs 1 crore for singles. (Source: Thinkstock)
Retail lending, including home and car loans are soon to become cheaper with the Reserve Bank of India Governor Raghuram Rajan announcing a 25 basis points cut in repo rates in its credit policy on Tuesday.
With the RBI keen to ensure that banks transmit its interest rate cut signal to the customers, lenders may soon announce cut in lending rates.
Borrowing is significantly cheaper now and will continue to do so, Rajan said.
Here is a short take on how a matching 25 basis points cut in lending rate by banks would ease repayment burden of borrowers. However, the extent of absolute benefit will also depend on the loan amount and the tenure.
With inputs from Anil Rego, CEO and founder, Right Horizons.