After 3.5 years, RBI hikes repo rate: How does it impact your EMIs & loan interest payout? Explained
Times of India 2 hrs ago·7 Oct 2026, 10:56 am
For the first time in 42 months, the Reserve Bank of India has raised the repo rate by 25 basis points. This is the key interest rate at which the central bank lends to commercial banks. Consequently, banks are likely to increase their lending rates, which directly affects borrowers. While this move aims to curb inflation, it makes new loans and credit card debt more expensive for the common man.
This hike will immediately impact those taking fresh loans, as interest payouts will be higher. For existing borrowers with floating-rate loans like home or personal loans, banks may choose to pass on the rate hike by increasing Equated Monthly Installments (EMIs). However, the exact impact depends on the specific terms of the loan agreement. It is important for investors to review their loan documents to understand their repayment schedule.
Investors should keep an eye on the quarterly monetary policy statements to gauge future rate movements. For those looking to park funds, the hike could be a positive development, potentially offering better returns on fixed deposits and other fixed-income instruments. It is advisable to compare interest rates across different banks before making any financial decisions.
Excerpt from Times of India
After 3.5 years, RBI hikes repo rate: How does it impact your EMIs & loan interest payout? Explained What happens to your loan EMI and tenor? Extending the tenor is the costlier route. At a 100 bps hike, keeping the EMI unchanged costs about Rs 22 lakh more than raising the EMI, because interest keeps compounding over…Read the original at Times of India
Key takeaways
- Category: Economy.
- AI reads the tone as negative (potentially bearish) for the stock.
- Flagged as a high-impact, market-moving story.
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