From April 1, DHFL Vysya Housing Finance decided to reduce interest rate on advances across the spectrum for new as well as existing borrowers by 20 basis points. The company is an associate of Dewan Housing Finance and operates in south India.
The Bangalore-based lender is the first housing finance company to announce lending rate cut this year, Managing director R Nambirajan said. At present, the company’s lowest lending rate is 12.25 percent a year and the rate increases depending on risk weight.
Nambirajan said the company could not reduce rate beyond 20 basis points because its lender banks have not cut rates even after Reserve Bank of India’s decision to lower the benchmark repo rate by 75 bps this year.
A 100 bps means one percentage point. The company announced a new loan scheme up to Rs 10 lakh for a maximum 11 year period with lower rate benefit.
The company would lend at 11.75 percent under this scheme, while the lowest rate in general will be 12.05 percent a year. Low and middle income borrowers are expected to benefit from the scheme.