The Reserve Bank of India (RBI) has announced a repo rate cut for the second consecutive time, bringing it down from 6.25% to 6%. This 0.25% reduction in the policy rate will significantly benefit loan takers, including those opting for car loans.
If you are planning to take a car loan or already have one, this change means lower EMIs and substantial savings over the loan tenure.
Car Loan Impact: How Much Will You Save?
Assuming a loan tenure of 7 years, here's how much you can expect to save on car loans of different amounts after the interest rate drop from 9.20% to 8.95% (as in SBI):
Car Loan of ₹10 Lakh
- Old EMI (at 9.20%): ₹16,191
- New EMI (at 8.95%): ₹16,064
- Monthly Relief: ₹127
- Total Saving (over 7 years): ₹10,668
Car Loan of ₹15 Lakh
- Old EMI (at 9.20%): ₹24,286
- New EMI (at 8.95%): ₹24,096
- Monthly Relief: ₹190
- Total Saving (over 7 years): ₹15,960
Car Loan of ₹20 Lakh
- Old EMI (at 9.20%): ₹32,382
- New EMI (at 8.95%): ₹32,127
- Monthly Relief: ₹255
- Total Saving (over 7 years): ₹21,420
Why This Matters
With loan amounts increasing and longer tenures becoming more common, even small reductions in interest rates can translate into substantial savings. The repo rate cut by RBI directly influences lending rates of banks, making loans cheaper for consumers.
Whether you're buying a budget-friendly car or a luxury vehicle, this rate cut can ease your financial burden significantly.
