Big Breaking: Good News for Loan Takers, RBI Cuts Repo Rate, Read.
For millions of borrowers, Friday is a huge relief. The Reserve Bank of India (RBI) reduced the repo rate by 0.25 percent as part of its monetary policy announcement. Following the three-day Monetary Policy Committee (MPC) meeting, RBI Governor Sanjay Malhotra declared that the Repo Rate had dropped from 5.50% to 5.25%.
It is important to note that this decision was made in order to address inflation, which has hit a historic low, and promote growth. The average person will directly profit from this change since EMIs will be less expensive.
Car and Home Loans Will Drop in Price
Banks will now receive cheaper loans from the RBI thanks to a reduced repo rate. It is anticipated that banks would soon give their clients this advantage. The interest rates on home loans, auto loans, and personal loans will drop as a result.
An example of savings would be someone who took out a ₹50 lakh home loan with 8.5% interest for 20 years; with the 0.25% reduction, their EMI would drop from ₹43,391 to ₹42,603. This translates to a monthly savings of ₹788 and an annual savings of ₹9,456.
For the fourth time this year, rates have decreased.
The RBI has lowered rates for the fourth time this year in light of the ongoing drop in retail inflation. Since February, there has been a 1.25% overall decrease. Nonetheless, throughout the previous two sessions, the Repo Rate remained constant.
According to Governor Malhotra, the GDP increased by 8.2% in the second quarter, indicating that the nation’s economy is doing well. He added that there was room for an interest rate reduction because retail inflation had dropped to a historic low of 0.25% in October.
Increased Demand for Housing
The real estate industry is likewise anticipated to benefit greatly from lower interest rates. More people will purchase homes as a result of cheaper borrowing, which will raise housing demand. The RBI’s action will boost market money flow and speed up economic activity.
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