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