Bank Refusing to Reduce EMI

[Macklon]

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?

 

[TaxWiser]

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?

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)

 

[Macklon]

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)

Thanks.

 

[Macklon]

Thanks. I will try to suggestions.

 

[Macklon]

I visited the bank (SBI) again requesting them to reduce my EMI as RBI has done rate cut. Bank told me that this can be done only once and that too only If I pay 20% of loan in a single go. They said for now this rate cut will only reduce the Interest on my loan.

 

[TaxWiser]

I visited the bank (SBI) again requesting them to reduce my EMI as RBI has done rate cut. Bank told me that this can be done only once and that too only If I pay 20% of loan in a single go. They said for now this rate cut will only reduce the Interest on my loan.

That’s quite a roadblock SBI has thrown at you, it’s disappointing when you're just trying to get what’s fair.

What they’re referring to sounds like a one-time EMI restructuring option, which often comes with conditions like partial prepayment (in your case, 20%) to lower the EMI. It’s unfortunate they’re not offering flexibility on interest rate transmission, especially since the repo rate cut should ideally reduce your burden more visibly.

But don’t worry, there are still options worth pursuing:

• Clarify if Your Loan Is RLLR-Linked: If your loan is based on the repo-linked lending rate, the new rate should reflect at your reset date (typically every three months). If it’s not RLLR, ask about switching - some banks allow this for a nominal fee.
• Politely Request Interest Rate Adjustment (Not Restructuring): You’re not asking for restructuring; just a reflection of the rate cut in your interest calculation or tenure. Frame this clearly in a written request or email.
• Ask for Written Policy Details: It’s okay to gently ask the bank for written clarification of their home loan rate change policy. This transparency is helpful for your records.
• Explore a Balance Transfer: If your current bank stays rigid, check if other banks like HDFC, Axis, or LIC HFL - offer better terms post-rate cut. Transferring your loan might be a smart way forward.
• Use AI for Support: Use AI to help draft formal requests, compose follow-ups, and analyze replies so your communication stays professional, clear, and effective.

And if nothing improves, gather all communication - emails, written replies, screenshots of bank policies - and escalate the matter to the RBI Ombudsman. You have every right to seek fairness, and the Ombudsman is there to help when banks don’t budge.

(Source: Summarized Using Samsung Note Assist)

 

[Macklon]

That’s quite a roadblock SBI has thrown at you, it’s disappointing when you're just trying to get what’s fair.

What they’re referring to sounds like a one-time EMI restructuring option, which often comes with conditions like partial prepayment (in your case, 20%) to lower the EMI. It’s unfortunate they’re not offering flexibility on interest rate transmission, especially since the repo rate cut should ideally reduce your burden more visibly.

But don’t worry, there are still options worth pursuing:

• Clarify if Your Loan Is RLLR-Linked: If your loan is based on the repo-linked lending rate, the new rate should reflect at your reset date (typically every three months). If it’s not RLLR, ask about switching - some banks allow this for a nominal fee.
• Politely Request Interest Rate Adjustment (Not Restructuring): You’re not asking for restructuring; just a reflection of the rate cut in your interest calculation or tenure. Frame this clearly in a written request or email.
• Ask for Written Policy Details: It’s okay to gently ask the bank for written clarification of their home loan rate change policy. This transparency is helpful for your records.
• Explore a Balance Transfer: If your current bank stays rigid, check if other banks like HDFC, Axis, or LIC HFL - offer better terms post-rate cut. Transferring your loan might be a smart way forward.
• Use AI for Support: Use AI to help draft formal requests, compose follow-ups, and analyze replies so your communication stays professional, clear, and effective.

And if nothing improves, gather all communication - emails, written replies, screenshots of bank policies - and escalate the matter to the RBI Ombudsman. You have every right to seek fairness, and the Ombudsman is there to help when banks don’t budge.

(Source: Summarized Using Samsung Note Assist)

Thanks.