RBI Hikes Repo Rate: Your EMI Rises How Much?

RBI raised the repo rate by 0.25% — the first hike in nearly 4 years. This means banks will likely raise lending rates, pushing up your home loan, personal loan, and car loan EMIs in the coming weeks.

Here's what happened: RBI's Monetary Policy Committee raised the repo rate by 0.25%, marking the first hike in nearly 4 years, signalling a shift away from its accommodative stance.. The repo rate is the rate at which RBI lends to banks — when it rises, banks' cost of funds increases and they typically pass this on to borrowers via higher lending rates.. All floating-rate retail loans — home loans, personal loans, car loans linked to external benchmarks like the repo rate — are directly affected and will reprice upward..

What you should do: Check your loan account or latest statement this week to see if your EMI amount or loan tenure has been revised upward by your lender.. Call your bank or log into net banking to confirm your current interest rate — if it hasn't changed yet, it likely will within one billing cycle.. Compare balance-transfer offers from other lenders now — if a competitor is offering a lower rate, switching before further hikes can save thousands over your loan tenure..

If your bank extends your loan tenure instead of raising EMI, you end up paying far more total interest. Explicitly ask your bank to raise EMI instead — this saves money long-term.