RBI Policy Decisions Impact: What decision did RBI take on repo rate? Will home loan EMI increase? What will be the impact on car loan and personal loan? Will those making FD benefit or suffer loss? What will change for credit card users?
Repo Rate Impact on Loans: If you have a home loan, car loan or personal loan or you have invested money in FD, then the new announcement of RBI is very important for you. The Reserve Bank has decided to maintain the repo rate at 5.25% in the monetary policy meeting today on June 5. This simply means that there will be no new shock in interest rates at present. However, RBI has also expressed the possibility of inflation increasing, hence, you may see some different impact on your pocket in the coming months. In such a situation, the biggest question is what will be the impact on EMI, FD, car loan, personal loan and credit card after this decision? Let us understand…
What decision did RBI take on repo rate?
The Reserve Bank has maintained the repo rate at 5.25% in the MPC meeting. There has been no change in interest rates. Along with this, the inflation estimate has been increased. The estimate of economic growth rate has been reduced slightly and a ‘wait and watch’ approach has been kept for the future. That means there is relief at the moment, but RBI is keeping an eye on the future situation.
What will change for home loan holders?
If your home loan is on floating rate then there will be no change in your EMI at present. Meaning EMI will neither increase nor decrease. The installments of the existing loan will remain the same as before. This is also a relief news for those who are planning to buy a house in the next few months because the loan has not become expensive yet.
What is the benefit to those taking car loan?
The situation is currently stable for people thinking of buying a car. Banks and finance companies usually decide the cost of loan according to the repo rate. Since there was no change in the repo rate, a big increase in new car loan interest rates is unlikely. The EMI of the existing car loan may also remain stable and there will be no immediate additional pressure on the cost of purchasing the vehicle.
What is the news for personal loan holders?
Personal loans are counted among the most expensive loans. There is little possibility of a sudden increase in interest rates after the RBI decision. EMI may remain stable for now. New personal loan borrowers can get offers at the current rates. However, personal loan rates also depend on the bank’s own risk policy.
What should credit card users know?
Many people think that changing the repo rate changes the credit card interest immediately, but this is not always the case. Still, high interest rates on credit cards may persist for the time being, there is little possibility of relief for those with outstanding balances and timely bill payment will remain as important as before. If you have a huge credit card outstanding, then reducing it quickly may be a better option.
What will be the benefit to those who get FD?
This decision is very important for investors making fixed deposits, because interest rates have not been cut, hence the current returns on FD can remain, many banks can continue offering attractive FD rates and senior citizens can also get the benefit of the existing schemes. For those who were waiting to get FD, this can be considered a good time.
What will be the impact on Savings Account?
Those having savings accounts will not see any major changes. The deposit rates of banks may remain almost at the same level as at present.
Can EMI increase in the coming times?
RBI has definitely expressed concern about inflation. If oil prices rise in the coming months, global tensions increase or inflation remains elevated, the RBI’s stance may change in future meetings. No such decision has been taken at present, but future data will be very important.