If your credit score is low, it would be preferable for you to take steps to improve it before applying for a long-term loan, such as a home loan.
The EMIs for loans, including personal loans, home loans, and car loans, are going to increase after the RBI raised the repo rate by 50 basis points to 5.9 per cent on September 30. This is the fourth straight rate hike by the bank regulator. Earlier the RBI raised repo rates by 40 basis points in May, 50 basis points each in June and August. Since May, the RBI has increased the benchmark interest rate by 1.90 per cent.
The interest rate hike was approved by the six-member Monetary Policy Committee (MPC), which is led by RBI Governor Shaktikanta Das. The rise in repo rates may pave the way for rate increases in the coming days and has brought interest rates on housing loans back into the spotlight. Banks are expected to soon revise their interest rates for home loans.
Another factor to consider is that the lowest home loan interest rates are typically granted to customers with excellent credit scores, which is above 750-800. Therefore, if your credit score is low, it would be preferable for you to take steps to improve it before applying for a long-term loan, such as a home loan.
As the interest rates are likely to go up after the hike in the repo rate you should avail the home loan before the banks revise their rates. Here are five banks that are now offering lowest annual interest rates on home loans. The list below only includes banks’ lowest advertised interest rates for home loans per annum.
1. Citibank – 6.65 per cent
2. Central Bank of India – 7.20 per cent
3. Standard Chartered Bank – 7.90 per cent
4. Kotak Mahindra Bank – 7.99 per cent
5. HDFC – 8.10 per cent
Aspiring homebuyers have a great opportunity to fulfill their dream of having their own house through the home loans. However, in order to keep the loan stress under check and pay off the full mortgage on time, homebuyers must make sure they have the necessary buffer funds and a sufficient income. According to BankBazaar, the interest rate that applies to each individual may be different based on one’s age, gender, income, credit score, loan amount, property value, or any other terms and conditions imposed by the lender.
