Home Loan: Will your home loan EMI cut RBI rate.

RBI rate cuts: Reserve Bank of India (RBI) has decided to reduce the repo rate by 25 basis points in the Monetary Policy Committee meeting on Friday. After this deficiency it will decrease to 6.25 %. This is the first time in five years to decide the RBI decision to reduce the interest rate. The RBI has reduced the growth of the Indian economy by 6.7 % due to geographical stress, defensive trade policies, rapid rapid prices of international commodity and uncertainty in economic markets.

What does this mean for borrowers?

This interest rate reduction is important for Indian borrowers who have taken home loans or personal loans. If banks decide to transfer profit to customers to this extent, customers will reduce the interest rate on their loan. Thus, their EMI volume will also be reduced. With the reduced repo rate, investment in government treasury bills will be cheaper. Other loans can also be cheap based on floating interest rate. EMI burden on borrowers is reduced. If the bank decides to transfer the relief of 10 to 15 base points of interest rates to customers instead of 25 basis points, the monthly home loan EMI will be reduced to that extent.

For new home loan customers ..

SEBI registered and investment expert Jitendra Solanki explained how the decision to reduce RBI interest rate is on home loan customers. Commercial banks explain how to transfer interest rate relief to new home creditors.

• Solanki said that the new home loan would be reduced by 1.80 per cent on 20 -year home loan, if banks offered their customers 25 basis points relief.
• Keeping history in mind, however, banks are likely to provide only 10 to 15 basis points to their customers. Solanki said, “If a bank transferred a 15 BPS interest rate relief to a new home creditor, the monthly home loan for a period of twenty will be reduced by 1.25 %.”

For existing home loan payments ..

• If banks transfer the RBI 25 basis points interest rate to their customers .. then the current home loan EMI payers can reduce their monthly EMI. Or they can reduce the deadline to pay their home loan.
• Since the home loan is already paying EMI, pay that the amount is not a major challenge. Therefore, the best method is to reduce the deadline of home loan. If the home loan pairs selects the option to reduce the duration of the home loan, the home loan of Rs 20 lakh (240 months) will reduce the home loan interest rate of 25 bps to 230 months. That is, they save about 10 months EMI.