Why are home loan interest rates expected to fall?

Home loan interest rates are expected to fall due to the Reserve Bank of India (RBI) reducing the repo rate, making it cheaper for commercial banks to borrow money.

What is the repo rate?

The repo rate is the interest rate at which commercial banks borrow money from the Reserve Bank of India.

How does a lower repo rate affect home loan EMIs?

A lower repo rate reduces the cost for banks, which can lead to lower home loan interest rates, thereby reducing EMIs for borrowers.

When can borrowers expect the impact of falling interest rates on their EMIs?

The impact may be seen in 3-4 months, as banks usually take time to pass on the reduced rates to their customers.

Should home loan borrowers switch from fixed-rate to floating-rate loans?

Yes, switching to a floating-rate loan can be beneficial to take advantage of future interest rate cuts.

Why are home loan interest rates expected to fall?

Home loan interest rates are expected to fall due to the Reserve Bank of India (RBI) reducing the repo rate, making it cheaper for commercial banks to borrow money.

What is the repo rate?

The repo rate is the interest rate at which commercial banks borrow money from the Reserve Bank of India.

How does a lower repo rate affect home loan EMIs?

A lower repo rate reduces the cost for banks, which can lead to lower home loan interest rates, thereby reducing EMIs for borrowers.

When can borrowers expect the impact of falling interest rates on their EMIs?

The impact may be seen in 3-4 months, as banks usually take time to pass on the reduced rates to their customers.

Should home loan borrowers switch from fixed-rate to floating-rate loans?

Yes, switching to a floating-rate loan can be beneficial to take advantage of future interest rate cuts.

What is the repo rate?

The repo rate is the interest rate at which commercial banks borrow money from the Reserve Bank of India.

How does a lower repo rate affect home loan EMIs?

A lower repo rate reduces the cost for banks, which can lead to lower home loan interest rates, thereby reducing EMIs for borrowers.

When can borrowers expect the impact of falling interest rates on their EMIs?

The impact may be seen in 3-4 months, as banks usually take time to pass on the reduced rates to their customers.

Should home loan borrowers switch from fixed-rate to floating-rate loans?

Yes, switching to a floating-rate loan can be beneficial to take advantage of future interest rate cuts.

What is the repo rate?

The repo rate is the interest rate at which commercial banks borrow money from the Reserve Bank of India.

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A Guide To Improving Your CIBIL Score Effectively

Tanisha

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Updated: 20-05-2025 at 10:50 AM

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The Reserve Bank Of India has decided to make lenders provide credit information every two weeks instead of monthly, to credit information companies (CICs) like CIBIL. This change will give more timely and accurate information about your credit behaviour. With these more frequent updates, you'll get a clearer and more current view of your credit score, helping you manage and improve it more effectively.

Let’s understand what the CIBIL score is and why it is important to have a good score.

What Is A CIBIL Score?

CIBIL score is a number that represents your creditworthiness. It ranges from 300 to 900, with higher scores meaning better credit health. CIBIL score is important for getting loans, credit cards, and sometimes even renting an apartment. Lenders use it to decide if they should approve your credit applications and at what interest rate.

The Credit Information Bureau (India) Limited (CIBIL) is the most famous of the four credit information companies licensed by the RBI. The other three companies are Experian, Equifax, and Highmark. CIBIL Limited keeps credit records for 600 million individuals and 32 million businesses.

As the CIBIL score shows creditworthiness, it helps lenders like banks and other financial institutions to decide whether they should give loans or not. Just like how a good credit score matters, a bad credit score also significantly helps lenders make decisions on whether to give loans or not.

750 and above is considered as a good credit score. If a person with a CIBIL score higher than 750 is trying to take a loan, the banks can make the decision easily as banks will know that the person pays his dues on time. However, if they had a CIBIL score lower than 750, the banks would be sceptical before lending them money.

What Is The New Update?

Credit information companies used to only receive updates on credit activity once a month, but with the new system, they will get updates on everyone’s credit activity every two weeks. This will significantly change everyone’s credit habits.

As the updates happen every two weeks, the CIBIL score will be updated way earlier than it used to be. All payments and missing payments will be shown in the CIBIL score much faster now.

Because of faster updates, there’ll be more accuracy in the person’s current credit status. This will also help people track their credit status better and can help people make better credit decisions. It also allows lenders to have the most up-to-date information when they review your credit applications.

“This is a very progressive move which will significantly strengthen the credit information ecosystem. With more frequent data reporting by banks and credit institutions, CICs will be able to update credit records faster and this will translate into more updated data being available for making informed lending decisions by credit grantors. This will also help in resolving consumer disputes faster based on updated data in the credit records. Credit information solutions help create economic opportunities for millions of people in India, and we take our responsibility to deliver accurate data very seriously. As India’s pioneer credit information company, we work constantly to strengthen the credit information ecosystem for the public good.” says the MD and CEO of TransUnion CIBIL, Rajesh Kumar.

How Will This Help Consumers And Lenders?

This new update will help consumers make smarter credit decisions and will improve their credit habits as they will be able to track their financial health better and more frequently. They will also be able to recognise any errors in the credit score quickly.

Lenders will have the most recent information when evaluating the loan application, which can lead to more favourable terms and interest rates if the credit score is in good shape. This will help consumers get better loans as well.

Conclusion

This decision to update credit reports every two weeks by the RBI is a positive step for managing credit health. It will also provide more accurate credit scores and also help streamline the credit process. Consumers should stay updated on their CIBIL score to make better financial decisions and to get better loans.

For any queries or complaints regarding the credit score update, send an email to CRPC@rbi.org.in or call 14448.

Frequently Asked Questions