Loan takers are having to pay interest through their noses and there has been no relief in sight for a long time. However, bucking the trend is this new-age online lender. Faircent.com has actually reduced interest rates on unsecured loans by a whopping 200 bps to 9.99% per annum for prime borrowers listed on its platform. This is lowest "lowest" interest rate for unsecured loans offered by any private/PSU bank or alternative lending platform in the country, Faircent claimed in a statement. It further said the reduction in lending rate is the "direct result of RBI regulating the peer-to-peer lending sector in India and recognizing it as an NBFC-P2P, thereby unlocking the alternative credit supply into the economy."

Significantly, unsecured loans are issued without any collateral and are supported only by the borrower's creditworthiness. 

 The Reserve Bank of India (RBI) had hiked repo rate in August 2018 from 6.25% to 6.50% to curb inflation. This affected both the existing as well as future borrowers taking loans from banks. Following RBI decision, several public sector and private banks have increased their Marginal Cost-based Lending Rates (MCLR), making the with borrowers pay higher interest rates and EMIs on their loans. Faircent.com has done the opposite. 

HDFC Bank recently hiked its base rate by 0.20 percentage points to 9.15 per cent. In June, it had raised base rate by 10 basis points to 8.95 per cent (100 bps= 1 percentage point). 

Other leading banks like SBI, ICICI Bank, Bank of Baroda, Indusland Bank and Union Bank of India have recently hiked their respective lending rates by 5 to 20 bps each.

"The slashing of rates for unsecured loan to as low as 9.99% p.a by Faircent.com, may have an impact on the lending sector by putting downward pressure on lending rates and will help consumers and small businesses access funds at a much lower cost to meet their credit requirements," the company said. 

Read full story here: http://www.zeebiz.com/personal-finance/news-loan-rate-down-while-hdfc-sbi-icici-indusland-bank-hike-lending-rates-this-lender-bucks-the-trend-64896