The Reserve Bank of India has announced a big gift to the middle class by announcing the cut in the repo rate. The repo rate has been cut by 0.25%, due to which the repo rate has now come down from 6.50 to 6.25. Now it is expected that banks also announce to reduce interest on your loan soon. If banks announce the interest rate cut, then your personal loan, car loan and home loan will be reduced.
How will EMI decrease after reducing repo rate
This question must also arise in your mind that if the RBI has cut the repo rate then how will the EMI of your loan be reduced? Actually, banks provide loans on two types of interest.
- First- Bank fixes give loans to customers at interest rate, which means that this loan runs on a uniform EMI from beginning to end. Whether the RBI reduces or raise the repo rate. There will be no change on the firing interest loan on this.
- Second- If you have taken a loan at a floater rate, then the EMI of the loan can increase and increase with the change of repo rate. After cutting the repo rate of RBI, the EMI or tenor of those taking loans at the floater rate may be reduced.
What to do to reduce EMI or tenor?
After the change in the repo rate of the Reserve Bank, if your bank has also changed the interest rate, then you do not need to go to the bank. If you have chosen the option of EMI (according to the change in repo rate) while taking a loan, then you will change in EMI, but if you have chosen the option of change in the loan tenure, then the tenure will decrease.
However, if you selected the option of change in tenor from it and want to reduce EMI, then there is a need to go to the bank. By going to the bank, you can make changes in EMI or tenor according to your query.
What to do if you are going to take a loan?
If you are thinking of taking a loan after cutting the repo rate of RBI, then you should first wait for a few days. When all banks change the interest of loans, one can review the interest of all these banks, where the loan is being received on the lowest interest. However, you should also get information about Hindon Charges, etc.
What to do if the bank is not reducing interest?
Even after the repo rate cut, if the bank is not reducing the interest rate on your loan, then you can transfer your loan to another bank. However, you should keep in mind that in the bank where the loan is transferred, you do not have to pay more interest and hidden charge.