HDFC has revised interest rates on NRI loan for the following schemes: Home Purchase, Home Construction and Home Extension / Home improvement schemes.
HDFC is India's leading housing finance company with a market share of over 55%. The company offers loans to both resident and non resident Indians through a variety of housing loan schemes. More recently the company has launched consumer finance schemes and offers loans to its existing borrowers for consumer durables and cars.
HDFC has reduced the interest charged on NRI loans for house purchase with a maturity of less than 5 years from existing 13% to 12% and for loans with maturity between 5 years and 7 years interest existing 14% to 13%. This rate cut will come in effect for the loans approved on or after January 18th 2000.
The interest rate on other loan product like home improvement, and land loans has been also reduced to 12% from the earlier rate of 13%. The reduced rate will be applicable on the loan approved on or after 18th of January. However interest rates charged on schemes for resident Indians remain unchanged.
The rate cut will come as good news for non resident Indians who have over the past month evinced interest in the property and real estate market in India. For resident Indians, the news may not be very far behind with the government announcing a cut in the interest rate on PPF and small savings schemes. As the cost of borrowing reduces for banks and financial institutions, the benefit of the rate cut will be passed on to consumers. The key beneficiaries of a rate cut (whenever announced) will be the borrowers who have opted for floating interest rate loans (as their interest charges are revised downwards) and new borrowers. The market may also see a rise in refinance activity as consumers seek to replace costlier loans with cheaper borrowings.
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