RBI has cut the repo rate by 25 basis points for the second consecutive time. Now the repo rate has reached 6%. This cut will have a direct impact on the EMI of home and car loans, which will now be reduced. Reserve Bank Governor Sanjay Malhotra announced the monetary policy on Wednesday, in which he gave the gift of cheap loans.
Earlier in February 2025 also, the repo rate was cut by 0.25 percent. This cut was made for the first time since May 2020 and with this the Reserve Bank has changed the monetary policy from neutral to accommodative mode.
How much difference will it make on EMI?
The biggest benefit of this reduction will be for those who have taken home loans and car loans. As the repo rate decreases, banks and financial institutions will also reduce the interest rates on their loans. This will reduce the monthly installment (EMI) of people. For example, if you have taken a home loan of Rs 30 lakh at an interest rate of 8%, now you will have to repay the loan at a lower interest rate, which will provide relief in your EMI.