New Delhi
CA Aayush Garg is a senior chartered accountant, qualified CS and CMA, as well as a gold medalist. His experience and understanding in the field of finance and taxation can prove to be very beneficial for the common people – at all a time when the RBI has recently cut the repo rate.
The Reserve Bank of India (RBI) has cut 25 basis points on 9 April 2025, reducing the repo rate from 6.25% to 6.00%. This is the second consecutive cut, before the repo rate was reduced by 25 basis points on 7 February 2025.
This step has been taken to speed up the economy, but CA Ayush Garg says, “The question is whether the existing loans are also getting the benefit of this rate cut?”
Necessary information for those taking existing loans:
It has often been seen that banks, especially private banks, give loans to new customers at a low interest rate, but old customers have to fill EMI at older, higher rates. If your loan is not linked, then you may not get the benefit.
What to do existing loan holder?
Check your loan agreement – See whether your loan is fixed, MCLR based or linked to repo rate.
Contact your bank – Ask if you have got the benefit of repo rate cut or not.
Ask for amendment in the interest rate – If not found, request the bank to reduce the rate.
Consider refinance – If your bank is not making changes, you can transfer cheaper loans from another bank.
Why do banks do this?
Often banks immediately apply new rates to attract new customers, but allow existing customers to repay loans at old rates – until the customers themselves do not take initiative.
At the end:
Ca Aaayush Garg suggests – “If you are paying a loan, do not assume that your EMI must have reduced automatically. Talk to the bank, compare rates and make sure that you are not paying more than needed.”
Do not assume that you are getting the benefit of this – ask, confirm and take important steps. ”
