EMIs to increase further

As predicted, the Reserve Bank of India has once again increased its repo rate. The repo rate was hiked by 25 basis points, the sixth time in a row, to 6.5 %. With this, the interest rate reached 6.5 % from 6.25 % so far. Also, MSF rates have been increased by 25 bps to take the interest on loans to 6.75 percent. The latest rate hike will affect interest rates on all types of loan. The debt burden on all types of loans varies between 2 and 4 % . To this effect the quantum of EMI or the duration of the loan tenure will increase proportionately. The customers of various loans are worried over the increased burden on them. Therefore, the increased repo rate by the RBI increased the debt burden on the customers of loan products