RBI increased interest rates by 0.90 percent in 35 days, what will be the effect on you
Earlier, on May 4, the Reserve Bank had increased the repo rate by 0.40 percent. In this context, RBI has increased the repo rate by 0.90 percent within 35 days. Now the repo rate has increased, then your loan will also become expensive and when the loan becomes expensive then your EMI will also increase.
The Reserve Bank of India has once again announced an increase in the repo rate. RBI Governor Shaktikanta Das said on Wednesday, 8 June that the repo rate has been increased by 50 basis points i.e. 0.50 percent. Let us inform that earlier, on May 4, the Reserve Bank had increased the repo rate by 0.40 percent. In this context, RBI has increased the repo rate by 0.90 percent within 35 days. Now the repo rate has increased, then your loan will also become expensive and when the loan becomes expensive then your EMI will also increase.
Let us try to understand with the help of an example, how will the increase in the repo rate by the Reserve Bank affect you. First of all, you should know that before May 4, home loan rates were 6.70 percent. But when the RBI increased the repo rate by 0.40 percent on May 4, it was 4.40 percent. After increasing the repo rate by 0.40 percent, ICICI Bank also increased the home loan rates by 0.40 percent from 6.70 to 7.10 percent. Accordingly, now the repo rate has increased by 0.50 percent, then it simply means that the home loan of ICICI Bank Bank will now increase from 7.10 percent to 7.60 percent.
Suppose now you take a home loan of Rs 30 lakh from ICICI Bank for 20 years, then you will now have to pay an EMI of Rs 24,351.57 every month at the rate of 7.60 percent. When the repo rate was at 4 per cent and the home loan at 6.70 per cent, this EMI was Rs 22,721. But when the RBI had increased the repo rate by 0.40 percent to 4.40 percent, then the home loan interest rates increased from 6.70 percent to 7.10 percent. At that time the EMI had increased to Rs 23,439. Now within the last 35 days, when the RBI has increased the repo rate by 0.90 per cent, your home loan EMI will increase by Rs 1630 per month.
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