I have got Home loan of Rs. 23 Lakhs from ICICI bank before a couple of months. After RBI’s big rate cut, ICICI bank has also cut rate its base rate by 0.35%.
My home loan is on floating rate on 9.90% with EMI of Rs. 22044 pm. After rate cut, a new rate will be now 9.55%. So will it automatically reduce the EMI amount or will I have the option to reduce no. of installments by keeping the EMI same as Rs.22044?
Also please suggest which one would be a better option?
Jignesh-There are two parts as you rightly guessed. Ons is they automatically reduce the EMI without altering the loan period. The second option is, you have instruct bank to continue with the same EMI and let them reduce the loan period. In my view, take advantage of rate cut and try to come out of loan as soon as possible. Hence, retain the same EMI and reduce the loan period.
Thanks Basu for your inputs 🙂