Loan borrowers have a reason to smile. The Reserve Bank of India has reduced the repo rate by 25 basis points, bringing it down to 5.25%. With this move, banks are expected to lower loan interest rates as well. So if your rate was previously 8.15%, it is likely to come down to around 7.90%. A small rate cut may not sound like much, but the savings over a long loan period are surprisingly big. Here is a clear, simple breakdown to show how much your EMI will reduce.
How Much Will Your EMI Reduce?
Loan Amount: ₹30 lakh
Tenure: 20 years
Old Interest Rate: 8.15%
New Interest Rate: 7.90%
EMI Before Rate Cut (8.15%): ₹25,390
EMI After Rate Cut (7.90%): ₹24,885
Monthly Savings: ₹505
Yearly Savings: ₹6,060
Total Savings Over 20 Years: ₹1,21,200
Yes, a 0.25% reduction in interest can save you more than ₹1.2 lakh over the full loan tenure.
Calculate EMI yourself
EMI Calculator (Old vs New Rate)