How Can Central Bank of India Home Loan Interest Rate Impact Your Financials?

Central Bank of India is one of the leading public sector banks offering a myriad of financial products and services. One such is a home loan that it provides to individuals wanting to buy, construct, renovate or extend a housing unit. What would matter the most is the rate of interest at which you get the home loan, isn’t it? Because the rate sets the tone for the kind of repayment you need to do over the loan term that can be a maximum of 30 years. The rate, even if higher by 0.25%-0.50% than what’s available in the market, will chuck out more from your pocket. Let’s see how much is Central Bank of India Home Loan Interest Rate and how will it impact your financials. 

What is the Central Bank of India Home Loan Interest Rate?

Central Bank of India charges home loan interest rates based on Repo Rate Linked Lending Rate (RLLR). The bank’s RLLR stands at 8.30%. The interest rate is arrived after adding spread to the RLLR. Upon adding the same, the interest rate comes as 8.60%-8.70% per annum. 

Factors Affecting Central Bank of India Home Loan Interest Rate

Home loan interest rates are dependent on the following factors – 

Loan Amount – This has a direct bearing on the interest rate. Greater the loan amount, the greater will be the risk exposure, translating into higher interest rates. The rates are segregated based on different loan amounts ranging upto ₹30 lakh, above ₹30 lakh to ₹75 lakh and above ₹75 lakh. 

Credit Profile – This also impacts the rate at which you’re likely to get a home loan from Central Bank of India. Greater the credit score, the more are the chances to access loans at a lower rate of interest and vice-versa. 

Property Value – Now this and the first point are interconnected to each other. The loan amount accounts for 75%-90% of the property cost. The value of the property is decided based on the legal and technical evaluation. So, the value will ultimately dictate the loan amount and the rate of interest to have. 

How to Determine the Cost of Central Bank of India Home Loan Interest Rate?

The cost is assessed by using the Central Bank of India Home Loan EMI Calculator. Which can be used online. The calculator takes into account the loan amount, rate of interest and tenure to compute the Equated Monthly Installment (EMI) and the overall interest outgo over the loan term. The EMI is a combination of both principal and interest payable towards a home loan. Not only that, the calculator even draws up an amortization schedule featuring the repayment of principal and interest on a periodical basis. You can even get to know the outstanding loan balance at the end of every year. This will help you figure out the time by which you can look to prepay the loan and save on massive interest repayments. To be able to accumulate the corpus needed to prepay the same, you need to invest in financial instruments according to your risk appetite. If you are into the 20s or 30s, you can start investing in products such as mutual funds, fixed deposits, etc, to shore up the coveted sum.