Under Reserve Bank of India’s (RBI) new rules borrower loan eligibility could drop while banks and finance companies will be forced to hike the EMI for some home loans when interest rates rise.
As per reports, banks will have to give borrowers the option of shifting to a fixed rate loan at the time of reset of interest rates.
Also lenders must note, if rates rise sharply, lenders must ensure that the EMI continues to cover the monthly interest on the loan.
Also after EMI is paid, previous month’s loan will not be increase for the lenders.
