RBI Rate Cut: How much will the expenditure on a person be reduced after the reduction in repo rate? Will be able to save every month

RBI Rate Cut: The Reserve Bank of India has reduced the repo rate by 25 basis points (0.25 percent) to 6 percent. This is the second time in the year 2025 that the RBI has cut the repo rate. Earlier in February, the repo rate was cut by 25 basis points, which was done for the first time in the last five years. The bank last reduced the repo rate in May 2020 during the Corona epidemic.

What will be the effect of reducing the repo rate?

Due to the reduction in repo rate, EMI on the loan will be reduced.

This will increase disposable income, which will increase spending on other goods.

Liquidity will increase in the market.

Demand will increase (auto, real estate etc.).

The economy will get a boost.

How much will the interest rate decrease?

Those taking home loans, auto loans and personal loans will benefit from the reduction in repo rate. You will get a loan at a lower interest rate. Now let's see how much savings will be made on home loans due to a 25 basis point cut in the repo rate. Currently, the interest rate on SBI home loans is 8.7 percent. If the banks also reduce the interest rate by 0.25 percent, then it will become 8.45 percent.

This much will be the savings on home loans

In this way, on a home loan of 25 lakhs, at the current interest rate of 8.7 percent, an EMI of Rs 31,264 has to be paid. If it is reduced to 8.45 percent, then the EMI will also become Rs 30,930. That means there will be a saving of Rs 334 every month. There will be a saving of Rs 4,008 in one year and Rs 40,080 on EMI in 10 years.

Similarly, on a home loan of Rs 50 lakh, currently, the EMI of Rs 62,529 has to be paid every month, after the reduction in repo rate, it will become Rs 61,859. In this way, you will save Rs 670 every month, Rs 8,040 in one year, and Rs 80,400 in ten years.

Even on a home loan of Rs 1 crore, the EMI will now decrease from Rs 1,25,058 to Rs 1,23,718, if the banks also reduce the interest rate by 0.25 percent. In this way, there will be a saving of Rs 1,340 per month, Rs 16,080 in one year, and Rs 1,60,800 in 10 years.