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Car EMI Hike: How Much Will Your Loan Cost After RBI Repo Rate Increase?
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News18•08-10-2026, 12:34
Car EMI Hike: How Much Will Your Loan Cost After RBI Repo Rate Increase?
- •The Reserve Bank of India has increased the repo rate by 0.25 percent, bringing it to 5.50 percent.
- •Borrowers with floating interest rate car loans may face higher EMIs if banks pass on the rate hike.
- •For a 10 lakh rupee loan over 5 years, an interest rate hike from 9% to 9.25% increases the monthly EMI by about 117 rupees.
- •Fixed-rate loan borrowers will not experience an immediate impact on their installments due to the repo rate hike.
- •Experts advise checking credit scores, comparing lender offers, and understanding all associated fees before taking a loan.
Key Questions Answered
The Reserve Bank of India increased the repo rate by 0.25 percent, bringing it to 5.50 percent.
For a 5-year car loan of 10 lakh rupees at an initial 9 percent interest rate, the monthly EMI is around 20,758 rupees. If the bank increases the interest rate to 9.25 percent following the repo rate hike, the EMI may rise to approximately 20,875 rupees, marking an increase of about 117 rupees per month.
If you have a fixed-interest-rate loan, the repo rate hike generally does not have a direct or immediate impact on your EMI because your interest rates are already locked in.
