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Number-crunching: What loan rate hike means for you
Published on Tue, Jul 01, 2008 at 08:30, Updated at Tue, Jul 01, 2008 in Money section
Tags: Home Loans, Interest Rates , New Delhi
LEND YOUR EARS: Your EMI will become dearer by Rs 1,020 for ICICI Bank borrowers.
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New Delhi: In a move that'll make you rethink your financial decisions, leading Indian banks on Monday hiked their interest rates to match the double hike of half-a-percent by the Reserve Bank of India.
It all started with SBI hiking their prime lending rates by half-a-percent and since then, nine other public and private sector banks have gone for a spike in interest rates.
But how does this translate for you?
Say if you have taken a home loan of Rs 20 lakh on floating rate for 20 years, then with the recent hike of 75 basis points your EMI will become dearer by Rs 1,020 for ICICI Bank borrowers, whereas HDFC's hike of half-a-percent will make your EMIs costlier by Rs 65. If you are an SBI loan holder, you’ll have to shell out an extra Rs 656.
But its not just your home loans that will become more expensive. A hike in prime lending rate means that all loans on floating interest rates will see a hike.
Here’s how your car loans will change:
If you have taken a car loan of Rs 5 lakh on floating rate over a period of five years, then ICICI Bank will charge you Rs 11,860 as against Rs 11,699 earlier - a spike of Rs 161.
HDFC will charge you Rs 107 more per month and a car loan from SBI will be dearer by Rs 104.
As inflation remains in the double-digit zone, analysts believe that the RBI could hike interest rates further later this year.
But for now the consumer has little choice but to shell out more.
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