By how much has your Home or Car Loan EMI increased? Know how beneficial it is to reduce the loan tenure

Photo: File Repo Rates

to control inflation RBI)’s campaign seems to be overshadowing the common man himself. Since May this year, the Reserve Bank has increased repo rates 5 times. The repo rate, which has been fixed at 4 percent since 2020, has now reached 6.25 percent with an increase of 2.25 percent. Obviously, the increase in the repo rate will make your home and car loans costlier. Not only this, apart from education loan, personal loan and business loan, it will also become expensive for the government to take loan from the market. Let us know how much the increase in the repo rate will affect your pocket.

How much will the home loan EMI increase?

The increase in the repo rate will also increase the home loan EMI. If you look at a general situation, if a person has taken a loan of 30 lakhs for 20 years, then after the latest increase, his home loan interest rate will be 9 to 9.30 percent according to the credit score. If we consider the interest rate as 9.25 percent, then now its EMI will be Rs.27,476, which was around Rs.23,250 before Corona.

Home Loan EMI

Image Source : FILE

Home Loan EMI

car loan

Image Source : FILE

car loan

The longer the tenure the greater the impact

Explain that the EMI of the home loan depends on the tenure of the loan. Extending the tenure reduces your EMI, but you have to pay more interest for the loan. Talking about the current increase, the increase in installment on loan tenure up to 20 years will be around 17 percent. On the other hand, if the loan tenure is increased from 20 to 30 years, then the increase in EMI will be around 23 percent. On the other hand, if the loan tenure is 10 years, then the increase in EMI will be around 10.5 percent.

What to do, increase tenure or installment

A person takes a home or car loan only when he does not have enough money. However, for the tenure of the loan, you must also calculate your retirement age. If you extend the tenure to control the EMI, you will have to pay higher interest on the loan. You also have the option of paying a lump sum amount. You can reduce your principal amount by paying a lump sum in between, which will also reduce your home loan EMI. At the same time, experts also agree that if you do not have any problem in repaying the increased installment of the loan, then you should avoid extending the tenure.

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