High Lending Rates Hit Home Loans Growth

Rising interest rates have hit banks’ consumer finance business, particularly the housing loan segment. In the unsecured loan segment. The growth in personal loans has moderated to 20% at Rs 81,451 crore as on November 23, 2007, as against a 35% growth at Rs 1,05,034 crore in the previous year.

The dip in growth is led by a slowdown in housing loan portfolios of banks. Interest rates on home loans have increased to over 10%, affecting demand. The rising Real Estate Prices have also had an impact on the loan growth.