If you’re on a fixed rate, you might want to evaluate if switching to a floating rate makes sense, depending on market conditions and your remaining loan tenure.

The Reserve Bank of India (RBI) reduced its key repo rate on Friday for the first time since May 2020, aiming to provide stimulus to the sluggish economy, which is projected to grow at its slowest pace in four years during the current fiscal year.

The repo rate cut is expected to lower interest rates on loans, particularly benefiting homebuyers and other borrowers.

The RBI MPC, which met for the first time under the new central bank governor Sanjay Malhotra, on February 7 cut the repo rate by 25 basis point to 6.25 percent to give a boost to a slowing economy. The rate-setting panel unanimously decided to continue with the “neutral” stance.

The RBI’s repo rate significantly influences personal loan interest rates. A rise in the repo rate leads to higher loan costs for borrowers, while a cut may lower rates, making loans more affordable.

EMIs on home and vehicle loans will come down, making it easier for individuals to repay their debts. A lower repo rate makes borrowing cheaper for individuals and businesses, which can lead to increased spending and investment.

The Reserve Bank of India (RBI) reduced its key repo rate on Friday for the first time since May 2020, aiming to provide stimulus to the sluggish economy, which is projected to grow at its slowest pace in four years during the current fiscal year.

On Friday, the Reserve Bank of India’s (RBI) six-member Monetary Policy Committee (MPC) reduced the repo rate, the rate at which the RBI lends to commercial banks by 25 basis points, bringing it down to 6.