Take a home loan? Find out the details of interest rate type – News18 Bangla


#Kolkata: It takes a lot of money to build a house or buy a flat. Home loan is mainly given for that cost. Customers can avail these loans from various banks and housing finance companies.

This time the loan has to be repaid to the lender with interest in monthly installments. What do we mean by home loan interest rates? The interest rate on a home loan is a percentage of the principal amount. In fact, the interest rate is determined by how much the borrower repays when repaying the loan.

There are usually two types of interest rates for a home loan – a fixed interest rate and a floating interest rate.

Fixed Rate Home Loan:In the case of a fixed rate home loan or a fixed interest rate on a home loan, the amount of the monthly installment remains fixed for the entire term of the loan. In this case, even if the market fluctuates, there is no effect on the fixed rate home loan. This means that regardless of the state of the market, the interest rate remains the same. In most cases, interest is paid as a monthly installment on the first installment of the home loan. After the repayment of the home loan, the principal amount is taken.

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Fixed rate home loan interest rates:HDFC Bank charges interest for only two years at a rate of 8.40% to 8.20% per annum for two years (based on loan quantum) and renews after the expiry of the two year term. That rate is set. The annual interest rate on Axis Bank Fixed Interest Rate Home Loan Scheme is 12.00%.

Advantages of taking fixed rate home loan:Despite the ups and downs of the market, there is no change in interest rates. Fixed rate home loan helps in long term planning. And since you have to pay a certain amount of monthly installments every month, it is also convenient for the borrower to make an income-expenditure account or budget. Because the amount of this monthly installment will never increase or decrease. In fact, consumers do not want any risk in the future. This type of home loan is convenient for him. Because it ensures financial security.

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Disadvantages of taking a fixed rate home loan:In this case the interest component remains constant. As a result, if the standard loan rate is called, then the borrower does not get much benefit.

Best Fixed Rate Home Loan:

The name of the bankInterest Rate (Percentage, Annual)
HDFC Bank6.40 to 8.20
Axis Bank12.00
State Bank of India (SBI)9.50 to 10.50
Bajaj Finserv Home Loan6.50 to 11.15
HSBC BankNeed to contact the bank

Floating Interest Rate:In the case of a floating interest rate, the bank charges an interest charge on the home loan based on the maximum current loan rate. In fact, the latest interest rates are released on the basis of RBI monetary policy and revised lending rates, among other things. And there is a relationship between that interest rate and the floating interest rate. It tends to change with the ups and downs of the market.

Advantages of Floating Rate Home Loans:The floating rate is determined based on the current interest rate. This is the biggest advantage. Because if the rate goes down, a lot of interest charges can be saved.

Difficulties in getting a floating rate home loan:If the standard rate goes up, then you have to pay high interest rate in case of loan repayment. Although this does not seem to be the case.

The name of the bankInterest rate (% per annum)
Union Bank of India6.60 to 7.15
Central Bank of India6.75 to 8.30
Bank of India6.75 to 7.15
Bank of Baroda6.75 to 8.10
State Bank of India (SBI)6.90 to 7.50
ICICI Bank6.90 to 7.95
Bank of Canada6.90 to 7.25
HDFC Bank6.90 to 8.20
IDFC First Bank6.00 to 7.00
Punjab National Bank6.00 to 7.60

How do fixed rate and floating rate work?Floating rate loans in our country do not usually change continuously. The RBI has directed banks to bring down interest rates for all customers. The bank then lowers the existing interest rate for new customers and then changes the interest rate according to the changes in the financial market. In case of old customers an interest rate is fixed at the outset. That is what they have to pay.

However, older customers may not be able to enjoy the benefits of reduced interest rates that relatively new customers enjoy. When the interest rate decreases, the EMI sometimes remains the same in the case of floating rate home loans and only the term of the loan changes. There are also some ‘reset clauses’ in the case of fixed rate loans, to which the terms and conditions apply. When the market fluctuates, it has an effect on the interest rate. ‘Reset Clause’ is subject to amendment. However, after a certain period of time, the type of this clause depends on the rules of the bank.

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