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Factors that Impact the Interest Rate of Home Loans

The interest rate charged by your bank to your home loan is your credit cost. Interest rates determine the borrowing costs of banks and financial institutions. The lender considers several factors when setting interest rates. Visit: http://www.wavecity.in/product/armonia-villas/

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Factors that Impact the Interest Rate of Home Loans

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  1. Factors that Impact the Interest Rate of Home Loans RERA No. : UPRERAPRM5538

  2. Introduction When you get a home loan from the bank, you should pay the interest. The interest rate you pay is the cost of credit, which determines the cost of getting money from the bank. So the general problem in almost every debtor's mind is how the lender's set interest rates.

  3. Let's take a look at some of the factors that often affect housing loan interest rates: Marginal Cost Fund Based Lending Rate (MCLR) Before understanding this, it is important to understand the concept of base rate. The Reserve Bank of India sets the lowest interest rate as the base rate and the bank grants with the higher interest rate than the basic interest rate. MCLR was initiated by the RBI to calculate the bank's benchmark lending interest rate. Thus, based on the MCLR calculation, the benchmark interest rate will be calculated and affected by the negative value of the option premium, the marginal cost of the funds, the operating costs, and the cash reserve ratio (CRR).

  4. Repo Rate This is the rate at which the Reserve Bank of India provides funds to banks in the event of any deficit. Repo rate is used to control inflation, so when interest rate cuts or increases, the interest rate on housing loans will have an impact.

  5. Reverse Repo Rate As the name suggests, this is the rate at which RBI gets back money from the bank. This helps to maintain the money supply tab and this rate increase or decrease may have a direct impact on the lending rate.

  6. Cash Reserve Ratio (CRR) This is a small portion of the total customer deposits held by the bank as an asset with the Reserve Bank of India. This will prevent the bank from using cash when it needs money while satisfying the customer's payment needs.

  7. Statutory Liquidity Ratio (SLR) This is basically the ratio of NDTL (Net Demand and Time Liabilities) to current assets. By keeping unilateral bounce, banks can not put more money into the economy, which can affect lending rates.

  8. These are some of the factors that affect the housing loan interest rate. Therefore, before you continue to fill out the loan application form for an independent Villa in Ghaziabad , please be sure to re-check the interest rates.

  9. Contact Us • Address:Sardar Kulwant Singh Chadha Marg, NH 24Ghaziabad , Uttar Pradesh 201015 • Phone No.: 1800-102-3957 WEBSITE:- http://www.wavecity.in

  10. Thank You

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