To Apply and Manage
your Home Loan.
Download our Mobile App
Indiabulls Home Loans
Apply
Online

India's 1st Completely Online Home Loan!

  • e-APPLY

  • e-SANCTION

  • `

    e-DISBURSE

Start your eHome Loans Process Now!

Apply Online
OR

Download our Mobile App

Enter Mobile Number to get app on your phone

+91
GET A
CALL NOW

Fill in the details below

  • Generate OTP

How rate Cuts affect under-process loans

How rate Cuts affect under-process loans
 

The borrower’s conundrum; How rate Cuts affect under-process loans:

A change in the rate of interest can greatly affect an under-process loan. If the rate change occurs after the customer has applied for the loan but before getting the first disbursement, the previous rate will not be applicable on the loan and the disbursement will happen at the new rate.

The reason the old rates are not applicable is because the entire process of approval takes a lot of time and the rate of interest may change greatly in that duration, as stated by bankers. The only rate which is taken into account is the rate present at the first disbursement.

If the rate experiences a cut in the repo rate and base rate before the first disbursement, then the cut will be linked to the base rate at which the first disbursement occurred. The changes by the bank, however, do not get passed onto its existing customers. The customer can decide to switch onto the new rate, but will have to pay a switch over fee and then be considered as a new customer by the bank.

Existing customers should keep themselves updated about the latest rates being offered to the newer customers by their banks and housing finance companies. If the rate is lower than the existing rate they are subjected to, they should consider switching over.

Related Articles:

The post How rate Cuts affect under-process loans appeared first on Indiabulls home loans.

Related Article
Types of Home Loan Charges

Types of Home Loan Charges

Most people fulfil their wish of becoming homeowners by taking out a home loan. It is the easiest way to afford a property as one can pay for the house in monthly instalments.

MCLR in Home Loan

MCLR in Home Loan

The interest rate is one of the most important components of a loan, especially in the case of a high-value loan that lasts for 2 decades or more; the home loan.

Share your comments on the article
0 / 3000
Read all comments

No Comments