RBI’s Repo Rate Cut: The Reserve Bank of India (RBI) has reduced the repo rate by 25 basis points, following a 25-point cut earlier. This brings the total reduction to 50 basis points in just two months. This move aims to encourage borrowing and boost economic activity. For many home loan borrowers, this is a welcome relief as EMIs could come down.
When the repo rate is cut, banks are expected to lower their lending rates. As a result, EMIs on home loans tied to the repo rate or MCLR may decrease. However, the actual reduction in your EMI depends on how much of this rate cut your bank decides to pass on. Not all banks transfer the entire benefit to customers immediately.
On the other hand, fixed-rate loans such as personal loans are not affected by repo rate changes. These loans carry a fixed interest rate and don’t fluctuate with RBI decisions. Therefore, customers with fixed-rate loans will not see any change in their EMIs. If your loan has a reset period, the new interest rate might apply only after that time. So, even if the repo rate drops now, the EMI reduction may be visible after a few months. It’s wise to speak with your bank and stay updated on how the rate cut impacts your loan.Experts believe the repo rate cut will support India’s economic growth by making borrowing cheaper. It can also bring stability to financial markets and improve cash flow. Short-term yields are likely to remain steady after a recent sharp drop.
Borrowers should check with their bank to know whether their home loan is linked to an external benchmark or MCLR. This will help them understand if their EMIs are likely to reduce.
Also Read:AP Urban Property Tax Doubles in 5 Years Burdening Citizens by ₹320 Cr
Share
BharatPe Secures RBI License for Online Payment Aggregation
Bhagyashree Borse: Latest Instagram update
