National Housing Bank (NHB) bans Penalty on Prepayment of Home Loans

In a significant development, the housing finance regulator, National Housing Bank (NHB) has banned the fine on pre-payment home loans taken from any of the 54 housing finance companies (HFCs) with immediate effect.

NHB has issued notice to the HFCs over the levy of pre-payment penalty. The move is aimed to protect the interest of homeowners those taken home loans from HFCs. According to media report, the regulator has also asked the housing finance companies that borrowers would pay the same interest rate on their home loans. NHB cleared that the housing companies will not levy any fee on floating rate home loans.

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SBI hikes Lending Rates by 50 bps

State Bank of India (SBI), the largest bank of India, raised lending rates by 50 basis points to 10 per cent on Thursday. Now the home, auto and corporate loans from the SBI will be costlier.

The hike in the base rate will come into effect from August 13, according to a statement issued by the bank. The bank hiked the benchmark prime lending rate (BPLR) by 50 per cent to 14.75 per cent.

Last month, the Reserve Bank of India had hiked the repo and reverse-repo rate while kept the Cash Reserve Ratio (CRR) unchanged. Since March 2010, the RBI hiked the key interest rates 11 times to tame the soaring headline inflation.

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Will the Loan Interest Rates Rise After Union Budget?

Business News This Week: Will the Loan Interest Rates Rise After Union Budget? The current fiscal is the best time for taking loans and purchasing vehicles if at all your planning for. Experts believe that the loan interest rates may go up as the RBI is scheduled to review its credit policy in April 10. The major objective of RBI would be to the cut the soaring food inflation and maintain the liquidity in the market.

According to some analysis the the cars loans and other loans would become dearer after the union budget 2010-11 and soon after the budget is presented the RBI will take care of the credit policies. RBI may bring some changes in the credit policy as per the requirement, which could have direct impact on the lending rates by the banks. Taking loans at floating would be disadvantages for the customers, while fixed rate is the best option for customers in regard to home loans.

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