Car-Bike loans will soon witness another rise in the installment & downpayment rates. RBI has revised the repo rates again within a month.
It's not long since we reported to you the increment in the car & bike loan rates (read here). Well, the news related to the vehicle loans is back in the limelight. Similar to the last time, the news is not good for the new prospective vehicle buyers. The EMIs related to all types of vehicle loans are soon going to step up monetarily.
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Reserve Bank Of India, which is also the regulatory body for the banks, has increased the repo rates yet again. This is the second time within a month that such action is taken. The increase in the repo rates this time is 50 bps. This straightaway means that the car & bike loans are soon going to get revised again. The revisions will surely plunge the installment rates towards the north.
Speaking of the repo rate, what is this? The repo rate can be defined as the interest rate at which the RBI provides the sum to the private banks. This directly translates into the fact, that a rise in repo rate is a direct rise in the interest rates. Additionally, these interest rates are paid by increasing the interest rates over the passenger vehicle loans, as they sell the most.
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Recently, a statement was released by the Federation of Automobile Dealers Association (FADA) when the repo rates were revised previously. The statement translates that the most hit market is the two-wheeler market. The majority of the two-wheelers are sold in the Tier-2 & Tier-3 cities as well as rural areas. The buyers are mostly first-time buyers & they use the EMI services to access their purchases. With the revision of repo rates, the moral support of the new two-wheeler buyers is going to go down surely.
Comment down below & let us know what you think about the soon-to-increase car & bike loan rates.
