Cheap Personal Loans Expected As RBI Likely To Cut Risk Weight Ratio

As per TOI news, Reserve Bank of India (RBI) is going to reduce the risk weight ratio for personal loans in coming days. The current risk weight ratio is 125% and the expected ratio is to 100%. The actual guidelines will be issued by the end of August 2019, as per RBI.

This will allow banks to reduce their loan rates on these loans. That means you will get cheap personal rates which are definitely good news for all personal loan seekers.

“Under the standardized approach for Credit Risk Management, consumer credit, including personal loans and credit card receivables attract a higher risk weight of 125 percent or higher, if warranted by the external rating of the counterparty. On a review, it has been decided to reduce the risk weight for consumer credit, including personal loans, but excluding credit card receivables, to 100%,” RBI said.

But don’t just get lured by the low-interest rates in personal loan. Make sure you are also aware of different other things before approaching a persona loan like :

  • Make sure you know how the interest rate will be applicable. Is it a fixed rate or a variable one.
  • Go for a loan as per your repayment capacity. Don’t just consume your entire eligibility as this may put in problem and you may find it difficult to repay the loan on time.
  • Make sure you check your CIBIL score before applying for personal loans. In case you have a bad CIBIL score, better to improve your score first.
  • Make sure you also checked with friends & family for financial help before seeking the personal loan. As this will help you to avoid such loans and pay huge interest amount.

Keep a track of this website for more such upcoming news in the personal finance area. Also, follow our YouTube channel for more updates & useful videos on Personal Finance in Hindi.

Disclaimer: The source of this news is: TOI. Our intention is to share the information with our readers to get some knowledge only. We are not liable to the accuracy of the impact of this news. In case you have any issue about this content, feel free to contact us.


I am a passionate blogger and personal finance enthusiast. Mostly share about investment tips, insurance guide, banking how to guides and various personal finance hacks through my blog. Checkout my first YouTube Channel on Personal Finance Guide.

Related Posts