Leading government lender Allahabad bank announced the merger of their mortgage loans which includes Allahabad Bank Gold Loan with the RBI Repo Rate which will make the loans cheaper.
In the new interest rate scheme, it will be 0.25% lower than the existing effective rates based on MCLR. New prices will vary from 8.25 percent to 8.35% of mortgage lenders and 8.65% of car lenders.
Current customers will have an option to switch to new loan schemes too.
Allahabad Bank has stated that it has set a loan rate of up to Rs 75 lakh with externally linked interest rates (EBLR), which includes the repo rate as one of its facilities.
To ensure a speedy transfer of policy adjustments, the bank has decided to charge its mortgage loans and mudra loans up to Rs. 75 lakh approved from September 1, 2019, in respect of EBLR, Allahabad Bank said in a regulatory filing.
The EBLR is built on the RBI repo standard – where the top regulator offers short-term loans to banks -, the average ten-year interest rate of the bank is close to 5 basic points and the premium credit risk on internal debt risk.
However, borrowers will have the option of lower interest rate loans (MCLR) or linked EBLR loans on acceptable terms, the bank said on file.
Also, all savings bank deposits of Rs 40 lakh and above will be linked to an external bank account from October 1, 2019, besides.
According to Nirmala Sitharaman, the banks would introduce repo rate and benchmark products linked to benchmarks that would lead to a reduction in EMIs in real estate, cars, and other retail loans.
This will reduce the EMI’s mortgage, car, and other mortgage lendings by directly linking repo rate and interest rates which means a temporary reduction is possible, which will directly benefit end consumers, he said on Friday.
In today’s time where so many lenders have come up with their exciting deals with the offering of Gold Loans, it has become difficult for the borrowers to decide and select one single lender that suits their needs and situations the best.
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