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Know how repo rate cut may reduce your EMI

New Delhi: The Reserve Bank of India today slashed its short-term lending rate by 25 basis points in its bi-monthly monetary policy review. After the cut, the repo rate will decline to 7.25 per cent
India TV Business Desk June 02, 2015 18:48 IST
India TV Business Desk

New Delhi: The Reserve Bank of India today slashed its short-term lending rate by 25 basis points in its bi-monthly monetary policy review. After the cut, the repo rate will decline to 7.25 per cent from the existing rate of 7.50 per cent.

Taking it into consideration, if banks follow the revised repo rate, it can provide you good benefit in EMI.

As per the current rate, your EMI will reduce by Rs 17 on every one lakh rupee loan.

Suppose, if you have taken a loan of Rs 5 lakh, then your yearly savings will be equal to 17 X 12, i.e. Rs 204. And if you have taken a loan of 5 Lakh rupees for 5 years, you will be save Rs 1020 every year, which means direct savings of Rs 5100 on five-yearly loan.

 

Home Loan   Period         Saving on EMI (Yearly)
15 Lakhs 5 Years    Rs 3060 (17 Rs per lakh)
40 Lakhs 10 Years    Rs 8160 (17 Rs per lakh)

 

Auto Loan

Period Saving on EMI (in 5 years)
10 Lakhs 5 Years 2040 Rs (17 Rs per lakh)