The repo rate is the interest rate that RBI charges banks to lend them money. Since October 2019, all major Indian banks have tied their housing loans to the repo rate, which allows policy rates to be transmitted instantly. SBI has adopted Repo rate as the external benchmark to link its floating rate home loans. My sister is a bank manager, and she told me one can make SBI Repo linked home loan by paying some amount to the bank.
How to Link SBI Home Loan Linked to Repo Rate?
I read that you can migrate from floating rate to Repo rate by paying a one time switch fee of Rs. 1000 + applicable taxes. Here are some things that you should be aware of about migrating from floating rate to Repo rate.
The process is irreversible, which means you cannot migrate back to floating rate once transferred.
These repo rates will be reset by the bank from time to time as per the bank’s extant guidelines in force.
EBLR is a new interest rate structure in which all floating rate home loans will have interest rates linked to External Benchmark.
These are a few things my sister told me about repo rate linked home loans. I also learned that this is done against government security but it’s a key financial management tool which has the ability to control inflation and support borrowers during economic crises.
I hope this gives you an insight into how to link SBI home loan with repo rate.
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How to Link SBI Home Loan with Repo Rate?
Farhan
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3 days
2024-12-30T10:24:56+00:00 2024-12-30T10:24:57+00:00Comment
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