Year Ender 2025: A bumper year for borrowers, thanks to the RBI – find out how many times interest rates were cut throughout the year..
The year 2025 was very special for borrowers. From the beginning of the year until December, the RBI (Reserve Bank of India) cut the repo rate several times, providing relief in EMIs for those with home loans, car loans, and personal loans. Interest rates were reduced a total of four times throughout the year, bringing the repo rate down to 5.25 percent by the end of the year. Let's understand how many times the RBI reduced rates from February to December 2025 and what impact it had on ordinary borrowers.
February 2025: The First Relief
At the beginning of the year, in February 2025, the RBI made its first repo rate cut. During this time, the repo rate was reduced from 6.50 percent to 6.25 percent, a total reduction of 25 basis points. This decision to cut the repo rate by 25 basis points came after a gap of two years. The last reduction before this was in February 2023. Therefore, people had been waiting for this decision for a long time. This decision proved to be good news for those who were already feeling the pressure of EMIs. People planning small savings and investments also benefited from this rate cut.
April 2025: The Second Cut Increased Relief
After February, in April 2025, the RBI reduced the repo rate for the second time. The repo rate was reduced from 6.25 percent to 6 percent, another reduction of 25 basis points. This step provided further relief in EMIs for borrowers. The burden of interest on home loans and car loans decreased, and the environment also became favorable for investors.
June 2025: The Third and Biggest Cut
In the June 2025 MPC meeting, the RBI cut the repo rate by 50 basis points, bringing it down to 5.50 percent. This was the biggest cut of the year so far. The impact of this decision was also seen in the market, and banks offered concessions on interest rates for home loans, personal loans, and car loans to their customers. This third-rate cut of the year proved to be a bumper one for the entire year.
August and October 2025: Rates remained stable
In the August and October 2025 MPC meetings, the RBI kept the repo rate unchanged. The repo rate remained at 5.50 percent. Although there was no further reduction, the benefits of the first three cuts of the year were already visible in EMIs, and the situation remained favorable for borrowers.
December 2025: Fourth cut ended the year with a bang
At the end of the year, in December 2025, the RBI cut the repo rate for the fourth time, bringing it down to 5.25 percent. This move once again created a sense of relief for borrowers by the end of the year. The total of four cuts throughout the year not only made home and car loans cheaper but also simplified personal finance and EMI management.
Year Ender 2025: Overall Impact
In 2025, from February to December, the RBI reduced the repo rate by a total of 1.25% in four installments:
25 basis points in February
25 basis points in April
50 basis points in June
25 basis points in December
What is the Repo Rate?
The repo rate is the interest rate at which the Reserve Bank of India (RBI) lends money to banks. Understanding this is important because this rate affects the entire banking system and lending decisions. When the RBI increases the repo rate, borrowing becomes more expensive for banks, and when it decreases, borrowing becomes cheaper for banks.
Impact of Repo Rate Reduction on the Common Man
When the RBI reduces the repo rate, banks get cheaper funds, and they, in turn, provide loans to their customers at lower interest rates. This directly impacts the loans of common people – EMIs for home loans, car loans, and personal loans decrease. This provides relief in monthly expenses and increases savings. In addition, cheaper loans also increase investment and purchasing opportunities.
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