RBI Repo Rate: The Reserve Bank of India (RBI) has once again reduced the repo rate, bringing good news for those with home and car loans.
This is the second consecutive rate cut in 2025. Previously, in February, the RBI had reduced the repo rate by 25 basis points, lowering it from 6.50% to 6.25%.
On April 9, RBI Governor Sanjay Malhotra announced another reduction, this time bringing the repo rate down to 6%.
Impact on Home Loan Customers
This reduction in the repo rate will provide significant relief for home loan customers.
Those with floating-rate home loans will see their EMIs decrease as banks pass on the benefit of the rate cut.
Additionally, people planning to take out a home loan will benefit from lower interest rates, making home buying more affordable.
Lower Interest Rates on Loans
Experts predict that banks will soon lower their interest rates on both home and car loans, following the RBI’s decision.
This will result in lower EMIs for current loan holders and for those looking to take out loans.
However, the reduced rates will primarily benefit those with floating-rate loans, as they are directly affected by changes in the repo rate.
Car Loan Benefits
The repo rate reduction also benefits car buyers. Car loan rates will fall, leading to lower EMIs.
People who had set a budget for purchasing a car may now be able to afford a more expensive model due to the reduced interest rates.
Currently, home loan interest rates range from 8.10% to 9.5%, and these are expected to decrease further after the April 9 reduction.
RBI Governor’s Announcement
On April 9, RBI Governor Sanjay Malhotra presented the monetary policy for the first quarter of 2025-26.
During the announcement, he revealed that the Monetary Policy Committee (MPC) had decided to cut the repo rate by 0.25%, following a three-day meeting.
This marks the second monetary policy of 2025.
What Should You Do?
If you are planning to take out a loan for a house or car, now is an ideal time to do so. With two repo rate cuts this year, banks are expected to reduce interest rates on loans.
However, it may take a few weeks for the new rates to be implemented. It’s advisable to wait for a bit before negotiating with banks to secure the best deal on your loan.
