Trends of loans in January 2012

In year 2011, RBI kept increasing rates till Nov and just by the year end, they gave signals that rates may come down.
So in year 2012, here is what we expect in the loans market.

• Personal loans Trends

Personal loans  rates were stable in between 14%-40%. This range is defined by where do you work, how much you earn and what is your credit history.
So If you work for a top brand and your salary is above 75000 per month, you can get a personal loan for 14% but if you salary is 10000 and you work in a small company, you can expect 30-40% rate of Interest.
Personal loan are given on fixed rates so RBI fluctuation during your loan tenure doesn't affect your rates for your ongoing personal loan.This means once you take a Personal loan and the rate is given by the bank, this will not change - may whatever is the market condition.
For year 2012- we see Banks may tighten there norms for personal loans as they see that recession may hit India and Personal loan being unsecured loan, Banks will like to take a risk averse actions and may give it to only where they are sure of that they will get it back.
The rates may reduce if RBI eases rates and liquidity , but may only happen for top executives and best companies.

• Home Loans Trends

In year rates touched 11% due to many hikes pushed by Rbi actions on liquidity etc.In another major move the regularity body on home loans issues guidelines to housing finance companies to go away with prepayment charges. The housing loan companies did and some Banks also had to follow the step of giving away prepayment charges.
This is one major help for customers who can now shift to alternate Bank/housing finance companies if there existing Bank is charging at a higher rate.
For year 2012, we expect Rbi to loosen the liquidity and for existing home loan customers- rates may come down. We also see rates coming down for new home loan customers.

• Car loans Trends

In year 2012 - in the first quarter 50 new cars are set to be launched in India.This will bring a lot more push to sell more cars and thus leading to more Car loans.
Car loan rates are fixed , so for customers rates do not change during the tenure of the loan. For new car loan customers- rates may come down with liquidity ease measures expected in the first three months.
The rates may come down also for used car loan market.
Thus in end, the rates will come down this year-But how much will depend on the inflation in the country and RBI measures.So expect a better year for loan takers but anyways taking loan

SBI Diwali Offers On loans and Gold 2011

State Bank of India (SBI) has brought many exciting offers this Diwali to help you celebrate the festival of lights in a grand way. These include car loans, home loans and gold sale.
"We are offering the purest form of gold coins at competitive rates in the market. All coins will be available at 1% discount," SBI's (Patna Circle) chief general manager Jeevandas Narayan said at a press conference here on Saturday.
SBI gold coins are available in denominations of 2gm, 4gm, 5gm, 8gm, 10gm, 20gm, and 50gm to suit the demands of customers. Customers can avail discount on all these denominations till October 30, 2011 only. A total of 110 SBI branches in Bihar and Jharkhand will be selling gold coins this festive season.
"We will set up exclusive counters on 'Dhanteras' at all gold coin selling branches to deal with the rush of customers. These branches will be kept open till 9pm on Dhanteras day," Das said. Currently, 2gm gold coin (99.99% pure) costs Rs 5,965 and 50gm coin Rs 1.43 lakh. SBI aims to sell over 50kg of coins on Dhanteras.
The bank also has offers for those wanting to avail car loans. SBI Car loan at an interest rate of 11.25% per annum till the end of this year. It will charge no prepayment penalty and no processing fee for it.
SBI home loan (below Rs 30 lakh) SBI will be charging 10.50%, which is a concession of 0.25%. Among its other features are free personal accident insurance up to Rs 40 lakh and no prepayment penalty.
Jeevandas also announced the launch of Vishwayatra Foreign Travel Card (VFTC) for SBI customers who want to go on foreign tour.
"Customers who have VFTC will get dollars when they use it to withdraw money in the United States. They will get currency of the particular foreign country which they are in. Customers can get these cards at 14 different major SBI branches (where foreign exchange facility are available) in Bihar and Jharkhand," Das added.
SBI has installed four permanent Self Service Kiosks (SSKs) to make transactions easy this festive season. One SSK each has been installed at its branches at Gandhi Maidan, Kadamkuan, Telco Colony in Jamshedpur and Ranchi branch. SSKs will perform various non-financial transactions, including pass book printing.
The bank has also come out with offers for NRIs, under which they can open accounts with SBI at zero balance and also avail various other services.

Mumbai banks plan to stay loan rates unaffected

Many banks in Mumbai are reconsidering their plans to hike home loan rates next month because of the upcoming holiday season, which will increase the demand for those loans.
This comes after the decision last week by the Reserve Bank of India to change policy rates. The banks said that they will potentially increase their lending rates next month when a review of the base rate is done.
Indian festivals such as Dessehra and Diwali in the next two months are expected to create a big demand for home, car, and personal loans because of the belief that this period is an auspicious time to acquire things.
“Banks may not hike home loan rates immediately since sales are expected to pick up soon after the Pitr Paksha is over,” said Oriental Bank of Commerce CMD Ty Prabhu.
The Hindu festival of Pitr Paksha is considered an inauspicious time to invest so loan rates may remain unchanged at this time.