Hyderabad: As interest rates are increasing again, your home loan becomes more burdensome. Some banks have already announced that they are increasing their interest rates. The increase in term or EMI has already been informed to borrowers. Let's see what can be done to lighten this burden.
The Repo rate, at which the country's central bank lends money to commercial banks, has started to rise this financial year. On Wednesday, it increased by 35 basis points to 6.25 percent. As a result, home loans have again reached 8.75 to 9 percent. For those who have taken loans at low rates, the interest burden will go up by lakhs. Debt to be settled in 20 years may continue for 30 years.
When interest rate is hiked, the burden will be higher for those who took loans at low rates of 6.75%-7%. The impact is less on those who took loans at 8.5-9 percent. As the interest rate decreases, the loan repayment period decreases. But, once interest rates are increased, the old period will be reached once again.
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If loan term is extended by two-three years during interest rate hikes, it should be considered excessive. Check the latest status of your loan. What is the applicable interest rate? How much has the duration increased? Check if there is an option to increase the EMI. Contact your bank or financial institution.