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After repo rates rise, how much your EMI will increase per lakh of loan

By Eva Wheeler

Photo: iStock

New Delhi: The Reserve Bank of India (RBI), at its monetary policy meeting held on June 08, decided to raise the repo rate again by 0.5%. This comes within 36 days of the last 40 basis point repo rate hike on May 4. Now, new and existing variable rate borrowers, such as home borrowers, will be required to distribute higher EMIs.
After the last hike, the total increase in the repo rate is 0.9%. After that, lenders like banks and housing finance companies will increase their lending rates accordingly, which means your EMIs will increase accordingly. If you have a home loan with Rs 30 lakh outstanding with a balance of 20 years at 7% pa your EMI will increase by Rs 1,648 from Rs 23,259 to Rs 24,907. According to ET, you may need to distribute an additional 55 rupees for every lakh rupee of loan for EMI.

Similarly, for a car loan of Rs 8 lakh for a term of 7 years, if the interest rate increases from 10% to 10.9%, the corresponding increase in EMI will be Rs 375 from Rs 13,281 to Rs 13,656.

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On a personal loan of Rs 5 lakh with a tenor of 5 years, if the interest rate rises from 14% to 14.9%, your EMI will increase by Rs 235 from Rs 11,634 to Rs 11,869, E.

“These two hikes in quick succession don’t sound like the end of rate hikes. Inflationary factors have yet to show any lasting signs of abating. “We may have seen the peak of inflation for now , but we may not have seen the end yet,” ET quoted Churchil Bhatt, Executive Vice President and Debt Investments, Kotak Mahindra

Life insurance.

On Wednesday, the Governor of the Reserve Bank of India (RBI) announced that the monetary policy committee had voted unanimously to raise the benchmark interest rate by 50 basis points with immediate effect. The RBI also left its FY23 GDP growth forecast unchanged at 7.2%.
The political repo rate now stands at 4.90%, still below its pre-pandemic level. The rates of the Standing Deposit Facility (SDF) and the Marginal Standing Facility (MSF) were raised by 50 basis points. The FSD rate is adjusted to 4.65%, the MSF rate adjusted to 5.15%.

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Eva Wheeler
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