The Reserve Bank of India (RBI) has reduced the repo rate by 25 basis points (bps) to 5.25%. After this reduction, taking any kind of loan from the banks would be cheaper. What is Repo Rate? The rate at which the RBI lends to banks is called the repo rate. When the RBI reduces the repo rate, banks get cheaper loans, and they pass this benefit on to customers. This means that in the coming days, loans like home and auto loans will become cheaper by around 0.25%. After the latest cut, the EMI on a ₹20 lakh loan for 20 years will decrease by up to ₹310. Similarly, the EMI on a ₹30 lakh loan will decrease by up to ₹465. Both new and existing customers will benefit from this. Rate cut to benefit all those people whose loans are linked with Repo Linked Lending Rate (RLLR)… If repo rate decreases, RLLR also reduces Banks determine their loan interest rates based on RLLR. If the repo rate decreases, the RLLR also reduces, and loan interest rates also go down. Banks add a margin over the repo rate to cover their expenses and profit in determination of the RLLR. Example: What difference will a reduction in interest rate make on EMI and the total loan? Loan Amount: ₹20 lakh How much benefit will you get? ▼ Interest reduction: 0.25% ▼ EMI benefit: ₹310 ▼ Interest saved: ₹74,000 ▼ Total saving: ₹74,000 Loan Amount: ₹30 lakh How much benefit will you get? ▼ Interest reduction: 0.25% ▼ EMI benefit: ₹465 ▼ Interest saved: ₹1.12 lakh ▼ Total saving: ₹1.12 lakh Post navigation 54% of IndiGo passengers troubled by delays and staff behavior:63% complaints increased in one year; 1,232 flights cancelled in November due to pilot-crew shortage ED attaches properties worth Rs1120 cr of Anil Ambani:Action taken in money laundering case; assets worth Rs10,117 crore seized by authorities so far
