New Delhi: The Reserve Bank of India has once again given a blow to the common man. The Reserve Bank has once again increased the Repo Rate to control the increasing inflation.
On the last day of the monetary policy review meeting chaired by Shaktikanta Das, RBI announced an increase of 50 basis points in the repo rate on Friday. After this hike, the repo rate has increased from 5.40 percent to 5.90 percent. This is the fourth consecutive time that the RBI has increased the repo rate. Since May 2022, the repo rate has been increased by 190 basis points.
Loans to turn expensive
The meaning of this announcement of RBI is that your EMI is going to increase significantly due to this. An increase in the repo rate simply means that there is an interest rate hike. Its effect will be seen in the form of home loan, car loan and personal loan EMI being expensive. Now all types of loans including home loan, car loan will become expensive. That is, your home loan installment will increase.
Interests on home loan increase
Suppose you have taken a home loan of Rs 30 lakh for 20 years and now your home loan interest rate is 7.90 per cent, then it is likely to increase to 8.40 per cent. Suppose you are paying an installment of Rs 24,907 to the bank every month. But following an increase of 0.50 percent in the interest rate, this will increase your installment to Rs 25,845. Now you have to pay Rs 928 more every month. According to this, your installment will be Rs 11,256 more every year.
Installment will increase on car loans
Suppose you have taken an auto loan for seven years worth 8 lakh rupees. The current installment amount currently paying an installment of Rs 13,698 at an interest rate of 11 per cent. At the same time, according to estimates, now this interest rate will increase from 11 percent to 11.50 percent. Due to this the installment will increase by Rs 13,909. That is, an additional burden of Rs 211 will increase on your pocket. According to this, you will have to pay about Rs 2532 more every year.
What is Repo Rate and Reverse Repo Rate?
Repo rate is the rate at which loans are given by RBI to banks and banks give loans to customers with this loan. An increase in the repo rate means that many types of loans from the bank will become expensive.
Reverse repo rate is the rate at which banks get interest from RBI on deposits.
