RBI hikes repo rate by 0.5%, read how much more common man will have to pay on EMI

The Reserve Bank of India (RBI) today increased the repo rate by half a percentage point with immediate effect. Repo rate is the rate at which the Reserve Bank gives short-term loans to other banks. With the increase in the repo rate, it is clear that the cost of raising money by banks and passing […]
 


RBI hikes repo rate by 0.5%, read how much more common man will have to pay on EMI

The Reserve Bank of India (RBI) today increased the repo rate by half a percentage point with immediate effect. Repo rate is the rate at which the Reserve Bank gives short-term loans to other banks. With the increase in the repo rate, it is clear that the cost of raising money by banks and passing it to their customers will also increase. This means that your loan EMI is going to increase soon. It is up to you banks as to how they proceed with this hike, but it is likely that with more than one hike, the impact of this hike in the repo rate will reach consumers at some point. Let us tell you how much your EMI will increase if your loan rates increase by half a percentage point.

What will be the effect of half percent increase?

On a home loan of Rs 30 lakh for 20 years, the EMI of the customers will increase by Rs 1680. According to the data provided by HDFC, the EMI of 7.55 percent on this loan will be Rs 24260 with interest of Rs 28 lakh. If a person takes a loan after increasing the interest rates by half a percentage, then he will have to pay an EMI of 25940 on this loan and his loan share will increase to 32 lakhs. That is, the EMI at the new rates will increase by Rs 1680 per month and the new customer will have to pay an additional interest of Rs 4 lakh in 20 years.

Will it affect existing customers as well?

The impact of the new rates on existing customers will depend on the interest rate chosen by them. Actually, the loan is given at two types of interest rates. Fixed rate loans mean that the rates do not fluctuate much. On the other hand, there are other variable rates that change with the change in prime rates. Generally, when interest rates are low and the loan is for a longer period, customers are advised to take a fixed rate loan, whereas if the loan is taken at a very high rate, a variable rate is advised. Is. Fixed rate loan. If your interest rates are fixed then you need not worry, however if you have taken a variable rate loan then you need to review as RBI has indicated that the rates may go up further.