Repo rate cut impact on loan takers

ET reports that Middle-class households across Delhi, Mumbai, Kolkata, Chennai and Bangalore spend around a fourth of their monthly take-home income on loan EMIs — housing, auto, durables and personal loans. And around two-thirds of these households have taken a personal loan only in the last two years. Take exposure to stock markets, for instance. Although at a national level it is a low 3% of all households, around a third of all socio-economic class (SEC) A & B metro households invest in stocks.

The Repo rate cut should come as a relief to home loan takers as the loan rates are predicted to fall. A half percentage cut will slash EMI by Rupees 35 on every lakh of loan. On the downside, getting that home loan will get tougher. Sources say that with property valuation dipping, the loan on offer has also shrunk. And that in turn has impacted the overall disbursal levels.