Impact of demonetization on Home loan

by Finway FSC Empowering People Financially

It's been nearly two years that demonetization had hit the nation. Well then it was hit, and now with the economy gradually garnering lost pieces is trying to stand on its own two feet. With real estate business being a large part of the economy it has been affected largely. This change is a pleasant one for the consumers as this marks a fall in the interest rates on home loans. Home Loan in Delhi or Mumbai, everywhere the lower interest rates is observed due to demonetization.

Many banks have reduced interest rates. Although RBI Governor did not change the repo rate due to the fear of inflation. This decision of the RBI has adversely affected the banks, but the consumers seem to be happy. The banks are controlled by the government and hence, the change has this impact on them due to changes in the fiscal policies. Much unlike Personal Loan in Delhi, this loan has dropped rates. This indicates happiness for consumers but at the same time a low in the economy of the country.

MCLR determines Home loan: As compared to the earlier situation when the home loan determiners were the RBI and the basic rate floated by them, now it is going to be MCLR. This is done to provide some relief of interest to the consumers who wish to take home loans. Not just in Mumbai, but also Home Loan in Delhi will now be affected by the MCLR. Even for the nonfinancial institutions, MCLR will determine the rate of interest.

Customers can Leverage the interest rates: With all changes made to the currency, the unchanged repo rate has disappointed the banks. The banks seem to have enjoyed the high rate of interest for a long time and now this is ceased. Now the borrowers are enjoying the interest rates and making the most of the demonetization in the country. However, this situation does not change in the case of Personal Loan in Delhi as there is no collateral and the rate of interest needs to be high in that case.

Overall all, the banks seem to be at the receiving end due to this extensive and deep thought move of the Indian Government. The changes in the fiscal policy have somehow given the benefit of a lower rate of interest in case they wish to opt for a home loan.