RBI Repo Rate Impact on Your Loan EMI

What is Repo Rate?

Repo rate is the rate at which RBI lends money to banks. It affects all loan interest rates.

How Repo Rate Affects Your EMI

When RBI increases repo rate, banks increase lending rates → Your EMI increases (if floating rate).

When RBI decreases repo rate, banks may reduce rates → Your EMI may decrease.

Current Loan Linking Systems

• MCLR: Marginal Cost of Funds based Lending Rate
• EBLR: External Benchmark Lending Rate (linked to repo rate)
• Fixed Rate: No impact of repo rate changes