New Delhi. Last week, the Reserve Bank of India had given the last gift of the year by cutting the policy interest rate repo rate. Now the country’s largest bank SBI has passed on this gift to its customers. This means that the amount of repo rate reduced by RBI, SBI has also passed on all that reduction to its customers. SBI said on Friday that it has reduced the interest rate on all retail loans by 0.25 percent. With this, all loans including home, auto will become cheaper and your EMI will also reduce.
SBI said that it has reduced the interest rates of all its types of retail loans by 0.25 percent based on external benchmark. This will benefit old loan holders as well as customers taking new loans. This means that whatever loan you are already availing from SBI, now its EMI will also be reduced. Not only this, customers who want to apply for a fresh loan will also be given the gift of reduced interest rates.
What is the interest rate now?
SBI said that based on external benchmark like repo rate, interest rates on all loans have been reduced by 25 basis points to 7.90 percent. Customers will get the benefit of this reduction from December 15. Earlier the loan rate in SBI used to start from 8.15 percent, but now it has come down to below 8 percent. After reducing the repo rate by RBI, all private and government banks will also have to pass its benefit to their customers. SBI has started this first.
What is the first EMI on Rs 50 lakh?
If someone has taken or is going to take a home loan of Rs 50 lakh from SBI for 20 years, then before today he would have had to pay 8.15 percent interest. At the same time, now this rate has come down to 7.90 percent. First let’s talk about EMI on old interest, at 8.15 percent your EMI would be Rs 42,290 every month. This means that in 20 years you will have to pay Rs 51,49,594 only as interest and the total loan amount will be Rs.
Rs 1,01,49,594.
How much money will be saved by reducing interest?
Now if we look at the EMI for a home loan of Rs 50 lakh at 7.90 per cent interest for a tenure of 20 years, it will come down to Rs 41,511. This means that you will save Rs 779 every month. This means that every year your savings from EMI will be Rs 9,348. You will have to pay only Rs 49,62,727 as interest for the loan in 20 years.
There will be savings of Rs 9 lakh in 20 years
If you put this savings in EMI instead of spending it in SIP, then by the time the loan gets over, you will have funds worth lakhs of rupees. If you start saving EMI every month i.e. Rs 779 in SIP, then your total investment in 20 years will be Rs 1,86,960, while you will get Rs 5,29,609 more in the form of interest. In this way, by the time your loan ends, you can earn Rs 7.16 lakh more. This means that you paid only Rs 42.46 lakh as interest on this loan. Now just imagine that the total interest paid on the earlier interest was Rs 51.49 lakh, but here the actual interest cost will be reduced by about Rs 9 lakh.
