Good News for Borrowers—EMI Relief on the Horizon?

Following the massive tax relief in Budget 2025, the middle class is now eagerly awaiting another financial breather—this time in the form of lower EMIs. With the RBI’s upcoming Monetary Policy Committee (MPC) meeting scheduled for February 5-7, there is growing anticipation that the repo rate might be reduced, making home and car loans more affordable.

The final RBI policy review of this financial year is particularly significant as it will be the first major announcement by the new RBI Governor, Sanjay Malhotra. The decision on the repo rate will be officially announced on February 7 at 10 AM, with live updates available on RBI’s official platforms.

For the past two years, the Reserve Bank of India (RBI) has kept the repo rate unchanged at 6.5%, with the last adjustment made in February 2023. This marks the 11th consecutive time the rate has remained stable. However, a shift may be on the horizon as economic conditions evolve.

A recent report by BofA Securities suggests that the RBI could lower the repo rate by 0.25%, bringing it down to 6.25%. Such a move would mark the first rate cut since the pandemic-era lows of 4%.

The repo rate is the interest rate at which commercial banks borrow from the RBI. When the RBI lowers this rate, it becomes cheaper for banks to access funds, which in turn can lead to lower interest rates on loans. This means:

✅ Lower EMIs on home and car loans
✅ Reduced interest burden on borrowers
✅ Improved liquidity in the economy

Currently, India is among the few major economies yet to implement a rate cut despite global trends moving in that direction. If the RBI decides to slash rates on February 7, borrowers can expect significant financial relief in the coming months.

With tax savings already in place due to the revised ₹12.75 lakh tax-free income limit, a repo rate cut could further ease financial burdens for millions of Indians. All eyes are now on February 7, as the RBI’s decision could determine whether home and car loan EMIs become lighter in 2025.

🔹 What do you think—will RBI reduce the repo rate? Share your thoughts in the comments!