What is the Impact of Bank's Revised Rates on your Home Loan?

The interest rate for financing services keeps changing. Every year, the Reserve Bank of India creates a new benchmark of interest rates. It needs to be followed by private as well as government financing institutions. The same goes for a home loan.

A lot of people think that revised interest rates are the best time to change from one financing service to the other.

However, it is not always true. In this article, you will learn about everything related to the revised bank interest rate as well as whether it is the right time to transfer or not.

What is a Revised Bank Rate?

When the Reserve Bank of India creates a new MCLR rate, it is known as a revised bank rate. This can either be a few points above the current rate or below, depending on the latest RBI rules.

MCLRs are the lowest benchmarks in terms of the interest rate that banks can charge in India. In other words, it is not possible for any financing institute to lend their services on rate below the current MCLR.

It is a mandatory rule implemented by the Reserve Bank of India that has to be followed at any cost. It goes for both the public sector as well as private sector financing companies.

What does Home Loan Transfer mean?

Who wouldn't want to save on interest rate for their home loan? For this, the best way is to shift from a high interest rate financing service to a lower home loan interest rate one. It is especially when the charges have been revised. To do so, you can use a home loan interest calculator.

It will allow you to figure out what the actual difference would be between your current and future financing service charges. Using these calculators will also help you to get the best home loan rates if you decide to transfer home loan eventually.