Rising Interest Rates of Home Loans in India

Before we talk about the interest rates and the effect that it has on the people in the current scenario, we should discuss about what exactly are home loans. Home loans are known as secured loans that are given by the banks when a borrower keeps their assets as collateral with them. There are many banks that offer home loans in India at attractive interest rates. If you plan a loan from a government funded bank, then getting a HDFC home loan would be an option that should be given due consideration. A home loan is a long tenure loan, it usually continues for 10 years or 20 years or may be even more than that. So, the rate of interest of these loans are lesser than that of the other loans in which are lesser secure such as the personal loan in which the borrower has no fear of losing the assets to the bank in case of non repayment of the loan that has been taken by them. There are some private banks that offer home loans at a good rate plus they also provide the facilities that make the life borrower quite easy. If you choose to get an IDBI home loan then the officials from the respective bank would go to the clients' residence or their office as the case may be, to make them understand about the features that the particular loan product has, and they would also assist them in completing the formalities to get their loan sanctioned.

Now a day the number of borrowers has reduced as the rate of interest has increased, due to the hike in the key rate of interest by the Reserve Bank of India. The banks have been forced to follow suit, and because of this there are lesser applications to get a home loan. Other than that some banks have also tighten the eligibility criterion for giving a home loan i.e. the person should have an annual income over six lakhs. This has also made the borrowers shy away from taking a loan at the current moment. Not just this because of the increase in the rate of interest the people who had opted for the floating rate interest option they are bearing the biggest brunt of this move taken by the RBI. The government is making all possible efforts to drive people to get a loan, as because, the interest rates have hiked there is a slowdown which can be seen in the real estate sector. The builders were earlier giving heavy discounts or freebies to the customers, but now they feel that these discounts and freebies are hurting them and they are suffering great losses. So, now these builders are not in a mood to give any sort of rebate to the buyers. These things have cascading effects the work has also become slower as there is a liquidity crunch in the market, to add to the inflation is killing the public. In short the finances of the middle class are in a great mess.

Summary The interest rates have been raised by the Reserve Bank of India to control the rising inflation and to control the falling of the Indian currency. Author Mr. Tejinder Singh is the owner of the website www.propertiesandloans.com, and on this site one can get all the information regarding the home loan in Delhi, and home loan calculator India. For more information contact the above mentioned site.