While the Reserve Bank of India (RBI) maintained the repo rate at its recent meeting, a reduction of 1% has occurred over the past year. This decrease, initiated through cuts in June (50 basis points), April (25 basis points), and February (25 basis points), has brought the repo rate down to 5.5% from 6.5%. This reduction directly benefits borrowers. Several government banks have adjusted car loan interest rates accordingly. For instance, SBI car loans have become 1% cheaper in the last year. However, the ultimate interest rate on car loans is influenced by various factors like credit history, CIBIL score, and the loan type. Borrowers opting for fixed interest loans may not experience immediate relief, while those with floating interest rates could see reduced payments.
If you plan to purchase a new car, you can estimate your EMI savings and the impact of interest rate cuts using the SBI car loan EMI calculator. For example, if you’re offered a car loan at 9.25% interest, a decrease from the previous 10.15%, the impact of a 1% reduction on a loan of 10, 12, or 15 lakhs can be understood.
