Whenever RBI increases the repo rate, the interest rate on the loan received from the bank increases.
After the increase in interest rates, both new and old customers taking home loans will be affected.
With an increase of 0.50 per cent, the repo rate has now increased from 5.40 to 5.90 per cent.
Mumbai. With the Reserve Bank increasing the repo rate, home and auto loans will become expensive and its effect will be on both new and old customers. The EMI of customers availing a home loan on floating interest rate will increase due to increase in interest rates. All banks and NBFCs use the repo rate as a benchmark for interest rate hikes. Whenever the repo rate increases, the interest rate on the loan increases.
With this announcement of RBI, people buying homes and cars on home and auto loans in the festive season can get a big blow. At the same time, existing auto and home loan customers will also be affected. The Reserve Bank has decided to increase the repo rate by 0.50 percent and now the repo rate has increased from 5.40 to 5.90 percent.
RBI Policy- How much will the EMI of home and car loans increase due to the decision of the Reserve Bank? understand calculation
Home loan EMI will be affected like this
Suppose a person has taken a home loan of Rs 50 lakh and the repayment period of the loan is 20 years. At present, the interest rate of home loan is 8.05%, but after the increase in the repo rate, it will now increase to 8.55 percent. This will increase the loan tenure by 2 years and three months. Due to this, the customer will have to pay an additional 11 lakhs as interest. However, this will be in case your EMI remains the same.
On the other hand, you have another option that you can keep the loan tenure unchanged by increasing the EMI. Suppose you have taken a loan of Rs 50 lakh for 20 years. Earlier the rate of interest on the loan was 8.05. Then his EMI was Rs 42,699. Since due to the increase in the repo rate, now this rate will be 8.55 percent. Because of this, the home loan EMI will increase to Rs 44,136. In this way, the EMI coming every month will increase by Rs 1437.
Actually, increasing the repo rate simply means that banks will get loans from the Reserve Bank at an expensive rate. At the same time, banks transfer this increase to the customers, due to which it becomes expensive for people to take loans. Not only this, new loans are expensive, but at the same time, the EMI of those home loans or car loans that are already running also increases.
Auto loan will also be expensive
If you are thinking of buying a car or other vehicle through loan, then now you will have to pay more interest, as well as the EMI of the customers whose car loan is going on will also increase. Suppose you have taken a car loan of Rs 5 lakh and its tenure is 5 years.
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At present, the current interest rate is 9.5 percent and under this your car loan EMI is Rs 10501. But now due to increase in the repo rate, the interest rate will increase to 10% and the EMI will increase to Rs 10624. That is, the current monthly installment of your loan will increase by Rs 123.
Tags: Home loan EMI, How to take home loan at low interest rate, Rbi policy
FIRST PUBLISHED : September 30, 2022, 12:22 IST