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Repo rate vs Loan EMI: How future RBI repo rate cuts may impact your home, auto and personal loan EMIs
Written By Shaghil Bilali
Published: | Updated:
Repo rate vs Loan EMI: Reserve Bank of India (RBI) governor Sanjay Malhotra maintained the repo rate at 5.5 per cent in the Monetary Policy Committee (MPC) meeting today. With 3 more MPCs to go for this financial year (FY 25-26), if the central bank cuts the rate, how much may you save on your home, auto and personal loan EMIs? Find out in this write-up.
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The Reserve Bank of India cut the repo rate in its February, April and June monetary policy meetings. Photo: Unsplash
Repo rate vs Loan EMI: In the February, April and June monetary policy committee (MPC) meetings this year, borrowers got huge relief from the Reserve Bank of India (RBI) as the central bank gave a cumulative rate cut of 100 bps. The significant rate cut translated into cheaper loans as equated monthly instalments (EMIs) of repo rate-linked loans also got slashed.
In contrast, in Wednesday's MPC meeting, RBI governor Sanjay Malhotra paused rate cuts, maintaining the repo rate of 5.5 per cent.
He said that the ongoing tariff tensions with the US are the cause behind the pause.
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It means there will be no change in EMIs of repo rate-linked loans.
But there is still a high possibility of future rate cuts with 3 MPC meetings to go for this financial year.
The next meeting is scheduled for September 29-October 1.
The subsequent meetings will be held in December this year and February next year.
If the RBI cuts the repo rate by up to 50 bps and those are reflected in bank loans, find out in this write-up how much you may save on your home, auto and personal loans.
Condition 1: If MPC cuts rates by 0.25%
Home loan EMI
We are taking the example of a 20-year home loan at a 7.5 per cent interest rate
| Loan amount | EMI before | EMI after | savings/year |
| Rs 20 lakh | Rs 16,112 | Rs 15,808 | Rs 3,648 |
| 30 lakh | Rs 24,168 | Rs 23,711 | Rs 5,484 |
| Rs 50 lakh | Rs 40,280 | Rs 39,519 | Rs 9,132 |
Auto loan EMI
We are taking the example of a 5-year auto loan at a 9 per cent interest rate.
| Loan amount | EMI before | EMI after | Savings/year |
| Rs 3 lakh | Rs 6,228 | Rs 6,191 | Rs 444 |
| Rs 5 lakh | Rs 10,379 | Rs 10,319 | Rs 720 |
| Rs 10 lakh | Rs 20,758 | Rs 20,637 | Rs 1,452 |
Personal loan EMI
We are taking the example of a 1-year personal loan at a 10.10 per cent interest rate.
| Loan amount | EMI before | EMI after | Savings/year |
| Rs 2 lakh | Rs 17,592 | Rs 17,569 | Rs 276 |
| Rs 3 lakh | Rs 26,389 | Rs 26,354 | Rs 420 |
| Rs 5 lakh | Rs 43,981 | Rs 43,923 | Rs 696 |
Condition 2: If MPC cuts rates by 0.50%
Home loan EMI
We are taking the example of a 20-year home loan at a 7.5 per cent interest rate.
| Loan amount | EMI before | EMI after | Savings/year |
| Rs 20 lakh | Rs 16,112 | Rs 15,506 | Rs 7,272 |
| Rs 30 lakh | Rs 24,168 | Rs 23,259 | Rs 10,908 |
| Rs 50 lakh | Rs 40,280 | Rs 38,765 | Rs 18,180 |
Auto loan EMI
We are taking the example of a 5-year auto loan at a 9 per cent interest rate.
| Loan amount | EMI before | EMI after | Savings/year |
| Rs 3 lakh | Rs 6,228 | Rs 6,155 | Rs 876 |
| Rs 5 lakh | Rs 10,379 | Rs 10,258 | Rs 1,452 |
| Rs 10 lakh | Rs 20,758 | Rs 20,517 | Rs 2,892 |
Personal loan EMI
We are taking the example of a 1-year personal loan at a 10.10 per cent interest rate.
| Loan amount | EMI before | EMI after | Savings/year |
| Rs 2 lakh | Rs 17,592 | Rs 17,546 | Rs 552 |
| Rs 3 lakh | Rs 26,389 | Rs 26,319 | Rs 840 |
| Rs 5 lakh | Rs 43,981 | Rs 43,865 | Rs 1,392 |
(Disclaimer: These are estimates and actual loan rate cuts may vary after RBI reduces repo rate.)
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