How the repo rate reaches your EMI
Most Indian floating-rate retail loans are linked to the RBI repo rate, so a policy change passes through to your loan within a quarter. It explains why an EMI or a tenure changes without you doing anything, and why a loan taken in a low-rate year can cost more later.
What it means
Most Indian floating-rate retail loans are linked to the RBI repo rate, so a policy change passes through to your loan within a quarter.
Why it matters to a household
It explains why an EMI or a tenure changes without you doing anything, and why a loan taken in a low-rate year can cost more later.
Where it trips people up
Missing that lenders usually adjust the tenure rather than the EMI. Your monthly outgo looks unchanged while the loan quietly runs longer.
In an Indian household
After a rate rise, check whether your tenure moved. If it now runs past your intended retirement, ask for the EMI to be raised instead.
Where FamTally comes in
FamTally is a free AI-driven money manager built for Indian families. It holds your loans, income, expenses, assets, insurance and goals in one place, forecasts five years ahead, and lets you ask an assistant questions about your own numbers rather than looking up general advice. Everything on this page is the kind of thing it works out for you automatically.
Stop doing this in a spreadsheet
FamTally keeps your loans, income, expenses, assets, insurance and goals in one place, forecasts five years ahead, and answers questions about your own numbers. Free, and built for Indian families.
Start freeQuestions people ask
How the repo rate reaches your EMI
Most Indian floating-rate retail loans are linked to the RBI repo rate, so a policy change passes through to your loan within a quarter.
Why does it matter?
It explains why an EMI or a tenure changes without you doing anything, and why a loan taken in a low-rate year can cost more later.
What do people usually get wrong?
Missing that lenders usually adjust the tenure rather than the EMI. Your monthly outgo looks unchanged while the loan quietly runs longer.
Is there anything India-specific?
After a rate rise, check whether your tenure moved. If it now runs past your intended retirement, ask for the EMI to be raised instead.