The Reserve Bank of India (RBI) sets the repo rate, which is an essential instrument for economic regulation. Coming to your query, does repo rate affect personal loan? Yes, interest rates on a range of financial goods, including personal loans, are immediately impacted. The cost of personal loans is affected whenever the RBI modifies the repo rate, since it affects bank lending rates.
Does Repo Rate Affect Existing Personal Loan?
The RBI’s repo rate does significantly affect personal loan rates in India. But the impact varies depending on whether your loan has a floating or fixed interest rate.
The loan with a floating interest rate may be indirectly impacted by changes in the repo rate.
Banks modify their lending rates in response to changes in the repo rate, which is the rate at which they borrow from the Reserve Bank of India. This can have an effect on the interest rate on personal loans, particularly those with flexible interest rates.
However, fixed-rate personal loans remain unaffected by repo rate changes since their interest is predetermined at disbursal.
I hope you found this information useful.
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Does Repo Rate Affect Personal Loan?
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2025-06-17T12:25:03+00:00 2025-06-17T12:25:05+00:00Comment
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