Buying a Home or Car Just Got Cheaper: EMIs Cut, Big Annual Savings Ahead

New Delhi: Reserve Bank Governor Shaktikanta Das on Friday, December 5, gave another big gift of the year to the people and cut the repo rate by 0.25 percent. As soon as this decision came, relief was clearly visible on the faces of lakhs of people taking home loans, auto loans, and personal loans.

As soon as the repo rate decreases, all banks also have to reduce their retail interest rates, the direct benefit of which reaches every loan customer. The thing to note is that RBI has reduced the interest rates for the third time this year, and the overall loan rates have now come down to 1.25 percent. This is no less than a gift for those who buy a house or vehicle.

What is the first EMI on a home loan of Rs 50 lakh?

Suppose someone has taken a home loan of Rs 50 lakh for a period of 20 years and is currently paying 8.25 percent annual interest on it. In this situation his EMI is Rs 42,603 ​​per month.

According to:

• Full interest: Rs 5,224,788
• Total liability: Rs 10,224,788

That is, a loan of Rs 50 lakh was taken, but even more than that had to be paid in interest.

What will be the new EMI after the rate reduction?

Now that RBI has reduced the interest rate by 0.25 percent, this loan will run at 8 percent annual interest. On this basis, the new EMI will be Rs 41,822 per month.

According to this:

• Full interest: Rs 50,37,281
• Total liability: Rs 10,037,281

This means that the interest burden has been reduced to a great extent and the total payment has also been reduced.

How much will be saved? know complete mathematics

With just 0.25% interest relief:

• EMI will be Rs 781 less every month
• Rs 9,372 will be saved every year
• Total savings in 20 years will be Rs 187,440.

It is clear that even a small interest deduction proves to be a big savings in the long run. This decision of RBI will not make the pockets of homebuyers lighter, and buying your house will become a little easier.