CURRENT AFFAIRS

Detailed explanation-1: -The interest rate will go up, which will extend the tenure of the loan. The impact will be bigger on longer loans. In case of a 20-year loan, at 7%, every 0.25% hike in rate will increase the tenure by roughly 10 months. The repo rate has been hiked by 0.9% in two tranches.

Detailed explanation-2: -Most banks provide a tenure of up to 30 years or until the retirement age of the borrower ends. The retirement age for employees in India ranges from 58 to 65 years.

Detailed explanation-3: -The RBI raised the Repo Rate by 35 basis points on December 7, 2022, bringing the rate up to 6.25% and marking the fourth hike or Repo Rate increase in 2022. Earlier RBI increased the Repo Rate by 50 basis points to 5.9% on September 30, 2022. In the current fiscal year, the RBI has increased the Repo Rate four times.

Detailed explanation-4: -However, there is a limit on extending the tenure, said experts. Most lenders have age limit such as 60 years for borrowers till the time a loan repayment tenure can be extended. If the tenure extension due to a rate hike goes beyond that they do not extend the tenure anymore.

Detailed explanation-5: -Personal loans having tenures of more than 1 year are usually considered as long term personal loans. However, some lenders may have different definitions for long term personal loans. Most banks and NBFC usually offer maximum loan tenure of 5 years for long term personal loans.