KEY HIGHLIGHTS
- RBI has cut the repo rate by 0.25%, giving relief to borrowers.
- Home, auto and personal loan EMIs will reduce depending on tenure.
- Biggest savings will be seen in long-term home loans.
The RBI has finally done it — repo rate down by 0.25%, and every home EMI discussion has picked up again.
If you’re paying a home loan, auto loan or personal loan, this small cut can still feel like a big breather.
New RBI Governor Sanjay Malhotra announced the cut after the MPC meeting, and the decision was taken unanimously.
So the big question is: exact EMI kitna kam hoga? Let’s break it down.
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EMI Comparison After 0.25% Rate Cut
| Loan Type | Tenure | Old Rate | New Rate | EMI Impact | Who Benefits Most? |
|---|---|---|---|---|---|
| Home Loan | 20 years | 8.5% | 8.25% | EMI drops significantly | Best relief for homeowners |
| Auto Loan | 5 years | 9.2% | 8.95% | Small EMI drop | Moderate benefit |
| Personal Loan | 1 year | 11.45% | 11.20% | Minor EMI drop | Least impact due to short tenure |
How Much EMI Drops on a 20-Year Home Loan
Long-tenure loans always show the biggest benefit. Even a 0.25% rate cut can save you several thousand rupees a year.
| Loan Amount | Current EMI (8.5%) | New EMI (8.25%) | Yearly Savings |
|---|---|---|---|
| ₹20 lakh | ₹17,356 | ₹17,041 | ₹3,780 |
| ₹30 lakh | ₹26,035 | ₹25,562 | ₹5,676 |
| ₹50 lakh | ₹43,391 | ₹42,603 | ₹9,456 |
For most middle-class families, home loan savings matter the most. And this cut is definitely paisa-vasool relief.
EMI Change on a 5-Year Auto Loan
Auto loans have shorter tenures, so EMI savings won’t be very large — but still noticeable.
| Loan Amount | Existing EMI (9.2%) | New EMI (8.95%) | Yearly Savings |
|---|---|---|---|
| ₹3 lakh | ₹6,257 | ₹6,220 | ₹444 |
| ₹5 lakh | ₹10,428 | ₹10,367 | ₹732 |
| ₹10 lakh | ₹20,856 | ₹20,734 | ₹1,464 |
Even though the savings look small, lower interest across the tenure still reduces your total outgo.
EMI Drop on a 1-Year Personal Loan
Personal loans are already short-term, so the EMI drop is tiny. But hey — relief is relief.
| Loan Amount | EMI at 11.45% | EMI at 11.20% | Yearly Savings |
|---|---|---|---|
| ₹2 lakh | ₹17,718 | ₹17,695 | ₹276 |
| ₹3 lakh | ₹26,578 | ₹26,542 | ₹432 |
| ₹5 lakh | ₹44,296 | ₹44,237 | ₹708 |
Frequently Asked Questions
1. When will banks start reducing loan interest rates?
Most banks pass on rate cuts within a few weeks, especially for floating-rate loans.
2. Will fixed-rate borrowers get any benefit?
Fixed-rate loans do not change automatically. You must switch to a floating plan or renegotiate.
3. Will EMIs automatically reduce?
If your loan is linked to the repo rate (RLLR), yes — EMI or tenure will adjust automatically based on the bank’s policy.
