In the past month and a half, interest rates have come down. The Center’s stimulus packages, intended to reverse the slowdown, has centered on rate cuts.

The trend has triggered speculation that home loan rates may well be back to 7.5-8 per cent soon from the current 10.5-12 per cent. Most borrowers anticipate the rates to reach such low levels, which is most unlikely.

Despite the downtrend in the interest rates, loans other than for housing has not seen rate cuts. For instance, car loans still go at 12.5-16 per cent. But many car makers and sellers and dealers offer goodies in the form of special cash discounts and free accessories and insurance.

Smart shopping                                           

Home-loan seekers will have to do some smart shopping and look for better deals from builders and lenders. The easing inflation, cooling petrol prices and the repo rate cut announcements by the Reserve Bank of India will help home loan borrowers. The huge gap between demand and supply in India’s housing sector will minimize the fall.

The economic slowdown is likely to act as a catalyst for demand as overall rate reduction and the sliding fuel prices will stabilize prices.

The savings in the hands of households will increase in the coming months. This will create new interest in buying houses, cars and other goods, which, in turn, will raise demand for loans. So, do not wait anymore and borrow from the best option available.

Many banks have already come up with announcements of reduced rates. Borrowers have to pick the best from the basket of offers available. If your current bank does not offer such benefits, switch to other banks instead of waiting.

           While reducing interest rates, each bank follows its own style.