RBI Rate Hike: What Home & Car Loan Borrowers Should Do As Rates Stay Higher For Longer

The RBI’s latest rate hike could increase borrowing costs for home and car loan customers, with further hikes expected before a possible prolonged pause. Existing borrowers may see higher loan servicing costs as rate transmission takes place, while those planning fresh loans may find it difficult to lock in lower rates at this stage. Prateek Ancha, Chief Economist, Axis Capital, explains how borrowers could be impacted as interest rates move higher and why there may be limited room for near-term rate cuts. The discussion also looks at high oil prices, rising global inflation and why policy rates could remain elevated for longer.