Repo Rate Up 0.25%: How Much Your EMI Rises?

RBI has raised the repo rate by 0.25% to 5.5%. This means banks will likely increase lending rates soon, making your home loan, car loan, and personal loan EMIs more expensive in the coming weeks.

Here's what happened: RBI's Monetary Policy Committee raised the repo rate by 25 basis points to 5.5%, citing broadening inflation risks across food and services sectors.. Governor Sanjay Malhotra signalled that the growth outlook remains firm, meaning the RBI prioritised inflation control over stimulating borrowing.. Banks are expected to transmit this hike to lending rates — especially EBLR-linked floating-rate loans — within one to two billing cycles..

What you should do: Check your loan agreement right now to confirm whether your interest rate is floating or fixed — floating-rate borrowers will see an EMI increase automatically.. Calculate your revised EMI using a free online EMI calculator with the new rate (add 0.25% to your current rate) so the change doesn't surprise your budget.. Consider making a partial prepayment on your home or car loan to reduce the outstanding principal before your bank officially reprices the rate..

Most banks reset EBLR-linked loans within 30 days of an RBI hike — if you prepay even ₹50,000 before that reset date, you reduce the principal the higher rate applies to and save more than the prepayment feels like.