Repo rate is just the interest rate at which the central bank lends money to commercial banks in case of a shortage of funds. I learned this from my father and he told me that this is done against government securities. So, your question about Axis Bank home loan linked to repo rate, I’d say that if a customer has a base rate, they can request to switch from MCLR to Repo rate by paying some amount. Let me explain how.
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How can I have an Axis Bank Repo Rate Linked Home Loan?
The repo rate is the crux of monetary policy, which highly influences a country’s financial outlook. In simple words, it’s an essential financial management tool which can not only control inflation but also make borrowing cheaper during economic crises.
Axis Bank has adopted the repo rate as the external Benchmark lending rate with effect from October 01, 2019. This means that all new floating rate loans and credit limits renewed with effect from this date will be linked to Repo rate.
Here are some pointers you should know about repo rate linked home loans.
If you are an existing customer at Base rate/MCLR, the existing loans and credit limits linked to MCLR will continue till repayment.
If you want to switch from this to the Repo rate, you can do so by paying an administrative fee of Rs. 10,000.
For this, you need to visit the nearest loan center with the co-applicant and/or guarantor to complete the required documentation.
All floating rate loans will get linked to Repo rate, which means the rate you will get will be the bank’s Repo rate plus spread.
The repo rate would be reset every three months and the bank is free to decide the spread over the Repo Rate.
I hope this helps.
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How to Link Axis Bank Home Loan with Repo Rate?
Fatima
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4 months
2024-12-27T10:38:23+00:00 2024-12-27T11:18:41+00:00Comment
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