Home and vehicle loan borrowers will now have more flexibility in managing the fluctuations in interest rates with the Reserve Bank of India (RBI) on Friday asking all regulated entities (REs), including banks and non-banking finance companies, to give personal loan borrowers an option to switch over from floating rate to a fixed rate regime at the time of resetting interest rates.
The central bank said the borrowers will also be given the choice to opt for enhancement in equated monthly instalments (EMI) or elongation of the tenor, the RBI said in a circular on ‘Reset of floating interest rate on EMI based personal loans’.