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How To Save On Your Loan EMIs By Making Just One Call In Your Bank

Newz On Tips
Fri May 01 2020 / By: Rashmi

In October last year, the Reserve Bank of India changed some rules that made the lending procedure more transparent, but banks were not ready to share that transparency with their customers. Banks nodded to RBI but didn't inform their customers about what is the repo-linked lending rate as it would have saved customers’ money.

What is RLLR?

There are three kinds of benchmarks a bank can set up on your loan's interest. If you have taken a loan between the period of April 2016 to September 2019, then your loan interest comes under something called the marginal cost of funds-based lending rate (MCLR). This MCLR is the banks' internal benchmark.

If you have taken a loan prior to April 2016, then your loan is linked to something called the Base Rate. This base rate is also a kind of internal benchmark set by the bank.

However, the problem with these internal benchmarks was that banks used to increase the interest rates when RBI increased its rates. But, when RBI used to lower its rates, banks never moved parallel to that.

RLLR Vs MCLR: How they stack up

To solve this grievance of customers, RBI made an external benchmarking regime called repo-linked lending rates or RLLR. This RLLR is directly proportional to the repo rate set externally by the RBI. The banks now have to link every bank loan taken after October 1, 2019, to this external benchmark system.

Now interest rates of those loans which are attached to RLLR are lower than that of MCLR or base rate as RBI has reduced the repo rate by 75 bps to 4.40% in March this year.

How to move to RLLR?

The process is as simple as just making a phone call or writing an e-mail. If your bank's customer care is open in lockdown, just dial the Customer Care number and make a request for changing your interest regime. However, if your bank's customer care service is down in lockdown, just write a request with your bank-attached e-mail about the regime change.

One more thing to notice: this regime change service is only mandatory for banks, not for housing finance companies (HFCs). They are not abided by this new external benchmark rule of RBI.

But one thing you can do to compel your housing finance company to lower your interest rate is to ask them to reduce your rate or to transfer your loan to some other lending company (essentially, a bank). No good housing finance company would want to lose a good customer. The company will have to reduce your rate to somewhat closer to RLLR.

Don't forget to do your homework before dialing up at your bank. Make sure you know all the market rates before starting to negotiate with your bank. Just 5 minutes of brainwork can save thousand-lakh of rupees of your hard work.

To save more of your hard-earned money, keep reading our blog.

Newz On Tips

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Worried Over Minimum Balance Requirements? Here Is The Best Way Out

Fri Aug 07 2020 / By: Rashmi

The spread of coronavirus across the globe has created a big dent on the financial conditions of everyone. With pay cuts, salary delays and even lay-offs, there is hardly any money coming in people’s bank account. In this situation, people who forget to maintain a minimum balance in their accounts get charged with hefty fines.

Amidst all this, top banks such as Axis Bank, Kotak Mahindra Bank and Bank of Maharashtra have announced a revision in the penalty charges of non-maintenance of minimum balance. The penalty has increased and so has the troubles of common people.

The Best Way Out: Open A Zero Balance Savings Account

One of the best ways is to open a zero balance savings account. If you are a salaried employee, chances are high that you already have it. Otherwise, you can also open one online.

Be it SBI, HDFC or ICICI or Kotak Mahindra, almost all the leading banks offer this zero balance savings account that offers various features and benefits. Some of the best ones include:

·     No Need to Maintain Minimum Balance: As the name suggests, you do not need to maintain a minimum balance, unlike a normal savings account. You will not be charged with any penalty even if you have no balance in the account.

·     Easy Transactions: Zero balance accounts offer net banking, allowing you to make easy cash transactions. You can use this option to pay your bills and make payments online.

·     Free Debit Card and ATM access: A zero balance account also offers you ATM access with Debit card across all the outlets.

·     Mobile Banking: Banks also offer mobile banking services with zero balance account which you can easily access from your smartphone. From checking your bank balance to making transactions and paying utility bills, you can use all these services easily through your mobile.

·     Interest Rates: In some banks, the interest rate on a zero balance saving account is the same as that on a regular saving bank account.

Apart from the features listed above, you can also avail various other benefits such as banking on Whatsapp, Virtual Debit Card, Personalized account number and so on.

Different banks offer different features of zero balance account but one thing that remains the same is that you do not have to maintain a minimum balance.

 For more such articles and updates from the banking sector, keep browsing

Apply for Kotak Bank Zero Balance Saving Account: Click Here

Apply for IndusInd Bank Zero Balance Saving Account: Click Here


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MSME credit line guarantee scheme: Now, individual entrepreneurs can also apply for loans

Mon Aug 03 2020 / By: Rashmi

In his speech of making India 'Atmanirbhar' (self-dependant), Prime Minister announced a boost of Rs. 20 Lakh Crore to the Indian Economy. Out of this Rs. 20 Lakh Crore, around Rs 1.37 lakh crore was sanctioned to MSMEs, under Emergency Credit Line Guarantee Scheme (ECLGS). But, to give relief to a broader set of people, Govt. of India has now announced that this ECLGS scheme will now also cover individual entrepreneurs.

Earlier, this used to cover only loans availed for Micro, Small, and Medium Enterprises, but with this new announcement, personal loans given for business purposes will also be counted under the ECLGS scheme.

Eligibility Criteria

A number of MSME organizations and market chambers suggested to the finance ministry that they should broaden their eligibility criteria to include individual entrepreneurs under this scheme. A great chunk of loan borrowers (around 80-90 percent) who had taken loans from NBFCs for their business tools or vehicles were ineligible for the Emergency Credit Line Guarantee Scheme yet.

With this change, individual business persons like cab or truck drivers, shop owners, lawyers, doctors, engineers, etc. will also be eligible for the loan.

However, the catch is that first-time loan borrowers can not get new loans under this scheme. People who have already taken loans from banks to Non-Banking Financial Companies can stretch their loans.

What Are The Benefits?

Talking about the scope of this new development, Debasish Panda, Secretary of Department of Financial Services said to the media, "A total of around Rs 1.37 lakh crore has been sanctioned under the scheme by member lending institutions to around 40 lakh accounts, of which around Rs 87,000 crore has been disbursed. The changes in the ECLGS scheme are likely to make an additional Rs 1 lakh crore eligible."

Companies that have an annual turnover of up to Rs 250 crore but have an outstanding loan of the amount up to Rs 50 crore can now avail an additional loan of up to 20%. This implies that individual entrepreneurs will now be eligible to get around Rs 10 crore as additional financing, instead of just Rs 5 crore.

To make sure that lenders don't charge too much from the borrowers, the central government has capped the interest rates. For banks and financial institutions, loans under the ECLGS scheme can only charge an interest rate of 9.25 percent per annum, while for Non-Banking Financial Companies, this cap is up to 14 percent interest rate per annum

According to market insiders, if executed before the prescribed date, this scheme can boost the economy enough that it can gain a stable momentum afterward.

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SBI Emergency Loan: How To Get Rs 5 Lakh In Just 45 Minutes!

Sat May 09 2020 / By: Rashmi

With jobs laid off and factories locked down, COVID-19 has taken up people's livelihood if not lives. With no income source, a large number of people are thinking of violating lockdown rules, just to earn pennies.

However, India's biggest lending institution has stepped in to give them a breath of ease. The State of Bank of India (SBI) has started to provide emergency loans to its customers with a hassle-free process.

The maximum amount of loan is Rs 5 lakh, and the loan type is - Personal loan. An account holder of SBI savings account can apply for this loan through the YONO app of SBI.

How To Check Your Eligibility Of Loan


Of course, the SBI is not lending money to every account holder. A background history check-up will be done of your account before lending you a loan. To check if you are eligible for the loan or not, you can choose any of the following two methods:

Through YONO App

●      Download the YONO App on your mobile phone. It is available in both- Google Play Store for Android users and the App Store for iOS users.

●      Once the app is installed, open it and click on the 'Pre Approved Loans' option.

●      An OTP will be sent to your linked mobile number. Enter that OTP in your app.

●      Your part of the job is done. SBI will reply to you in 45 minutes.

Through SMS

●      Open your text messages and Type PAPL and the last four digits of your SBI bank account number in the text area.

●      Send the message to 567676 through your linked mobile number.

●      SBI will send further query questions like loan amount. Reply, as per your need.

●      The bank will reply you back in 45 minutes.

Interest Rate and EMIs

If your bank account is eligible for the emergency loan, SBI will credit the money into your bank account in less than 45 minutes. The interest rates for the loan will be 10.5 percent.

Compared to the interest rates of personal loans given by other banks, the interest rate on the SBI Emergency Loan is pretty fair. And the best thing about the loan is that the EMIs will start after six months of the loan approval.

We will update the news as soon as the bank gives more updates on the loan. Still, if you have any queries about the loan, you can contact the customer care services of the bank.

For more such news and trending stories on the banking sector, keep reading BankingOnTips.