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The good news that the common people were waiting for, today Governor Sanjay Malhotra has given that good news. Announcing the results of the RBI MPC meeting, the Governor has decided to cut the repo rate beyond the expectations of the common people. People were expecting a cut of 25bps, but the Governor has announced a bumper cut of 50bps. After this cut, the repo rate has come down from 6.00% to 5.5%. Its tremendous effect will also be seen on your EMI. Know how the EMI of the old home loan, auto loan and personal loan will come down after this bumper cut.

If you have taken a home loan of 20 lakhs for 20 years at an interest rate of 8.5%, then your EMI will be Rs 17,356 per month. But after a 0.50% cut in the repo rate, your EMI will be calculated at 8.00% interest rate and it will come down to Rs 16,729. In this case, you will save Rs 7,524 annually.

If you have taken a loan of Rs 30 lakh for 20 years, then the current EMI will be Rs 26,035. After a 50bps cut in the repo rate, it will become Rs 25,093 at 8.00% and there will be a saving of Rs 11,304 annually.

If you take a loan of Rs 50 lakh for 30 years, the current EMI will be Rs 38,446 at 8.5%. After a 0.50% cut in the repo rate, it will become Rs 36,688 at 8.00%. In this case, you will save Rs 21,096 annually. If you take the same loan for 20 years, then at the rate of 8.5%, the EMI will be Rs 43,391. After today's 50bps reduction, it will become Rs 41,822. In this case, your annual savings will be Rs 18,828.

If you have taken an auto loan of Rs 3 lakh for 5 years at an interest rate of 8.7%, then your EMI will be Rs 6,184 per month. After a 0.50% reduction in the repo rate, it will come down to Rs 6,112 with an interest rate of 8.2%. In this case, you will save Rs 864 annually. If you have taken the same loan for 3 years, then at the interest rate of 8.7%, your EMI will be Rs 9,498. After the reduction in the repo rate, your EMI will also come down to Rs 9,429. In this case, you will save Rs 828 annually.

If you have taken a personal loan of Rs 5,00,000 for 5 years at an interest rate of 11.50%, then your EMI will be Rs 10,996 per month. After a 0.50% cut in the repo rate, your EMI will now be calculated at 11% interest rate and it will become Rs 10,871. In this way, you will save Rs 15,00 annually. On the other hand, if you have taken a loan of Rs 5 lakh for 3 years, then at 11.5%, the EMI will be Rs 16,488, which will now be reduced to Rs 16,369. In this way, you will save Rs 1,428 annually.

Just as you take a loan from the bank to fulfill your needs and repay it with a fixed interest, similarly, public, private and commercial sector banks also need to take loans to fulfill their needs. In such a situation, the interest rate at which the Reserve Bank of India gives loans to banks is called repo rate.

Repo rate is a kind of benchmark, on the basis of which other banks determine the interest rate of loans given to common people. When the repo rate increases, banks get loans at higher interest rates. In such a situation, banks also increase the interest rate of home loan, car loan and personal loan for the common man and this affects the EMI. On the other hand, when the repo rate decreases, banks get loans from RBI at cheaper rates, in such a situation banks also start giving loans to their customers at cheaper rates.