Bank Refusing to Reduce EMI

Macklon said:

Hi there,
Since RBI have cut down the ROI on Home loans I checked my loan AC statement and saw that I didn't get the benefits of RBI rate Cut. So I went to the bank and asked them to reduce my EMI but they are refusing to do so. They are saying there's no such rule to reduce EMI after rate cut or to ask customer if they want to reduce EMI or Tenure.

What should I do now?

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Here’s What You Can Do:​

• Understand Your Loan Type – If your loan is linked to RLLR (Repo Rate Linked Lending Rate), the reduction should apply at the next reset date (usually every three months). If it’s tied to MCLR, the rate change might take longer or require a request.
• Talk to Your Bank Again – While banks don’t automatically reduce EMIs, they can adjust your EMI or tenure if you ask. Try reaching out formally, either by email or a written request.
• Ask About Converting Your Loan – If you’re on MCLR or an older benchmark, switching to RLLR might be an option, though banks may charge a small fee for this.
• Explore Loan Transfer – If your current bank refuses to adjust your rates, consider refinancing with a lender offering better terms. It can be a hassle, but could save you a lot in interest over time.
• Escalate If Needed – If you feel the bank isn’t being fair, you can escalate the issue to the RBI Ombudsman.

Bottom Line:​

TaxWiser said:

I totally get why this situation is frustrating! You were expecting some relief from the RBI’s rate cut, but your bank isn’t making it easy. Don’t worry - you have options, and with a little persistence, you can get the benefits you deserve.

Here’s What You Can Do:​

• Understand Your Loan Type – If your loan is linked to RLLR (Repo Rate Linked Lending Rate), the reduction should apply at the next reset date (usually every three months). If it’s tied to MCLR, the rate change might take longer or require a request.
• Talk to Your Bank Again – While banks don’t automatically reduce EMIs, they can adjust your EMI or tenure if you ask. Try reaching out formally, either by email or a written request.
• Ask About Converting Your Loan – If you’re on MCLR or an older benchmark, switching to RLLR might be an option, though banks may charge a small fee for this.
• Explore Loan Transfer – If your current bank refuses to adjust your rates, consider refinancing with a lender offering better terms. It can be a hassle, but could save you a lot in interest over time.
• Escalate If Needed – If you feel the bank isn’t being fair, you can escalate the issue to the RBI Ombudsman.

Bottom Line:​

Banks won’t automatically reduce EMIs - you need to push for it. Start with a formal request, explore loan conversion, and if needed, look into refinancing. Don’t hesitate to stand your ground - it’s your money, after all!

Note: Let AI help you draft a request to your bank and guide you in responding to their replies!

(Source: Gemini AI)

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