Published on Oct 14, 2025Updated on Nov 3, 2025
The Reserve Bank of India (RBI) has recently announced its decision to keep the repo rate unchanged at 5.50% for the second consecutive time. The Monetary Policy Committee (MPC) also maintained a neutral stance, signalling that the central bank is closely watching inflation and growth before making any further changes.
For many borrowers, this news on the repo rate may raise questions about its effect on their finances. In particular, those with a personal loan or planning to take one might be wondering whether this decision will influence the interest rates they pay.
In this article, we will break down what the RBI’s move means for personal loan borrowers and how it could impact your repayment plans.
Must Read: Personal Loan Interest Rate
The repo rate is the rate at which the Reserve Bank of India (RBI) lends funds to commercial financial institutions. It is a key monetary policy tool that directly influences the cost of borrowing in the Indian economy. By adjusting the repo rate, the RBI manages liquidity in the system and keeps inflation under control.
For borrowers, the repo rate matters because it affects how financial institutions adjust their lending rates. With mechanisms like the External Benchmark Linked Rate (EBLR) and the Marginal Cost of Funds-based Lending Rate (MCLR), changes in repo rate are passed on more effectively to customers.
The impact is most visible in loans linked to a floating interest rate, where EMIs can rise or fall depending on policy changes. On the other hand, those with a fixed interest rate are not directly affected by repo movements, at least until they opt for loan refinancing or take a new loan.
As per the recent announcement, the latest RBI repo rate stands at 5.50%. The Reserve Bank of India (RBI) has chosen to keep this rate unchanged for the second consecutive time after the August 2025 MPC meeting.
The last change in the repo rate occurred in June 2025 , when the Monetary Policy Committee cut the rate from 6.00% down to 5.50%.
If the repo rate had increased, financial institutions would likely have raised lending rates, resulting in higher EMIs for existing loans and increased borrowing costs for new applicants.
On the other hand, a cut in the repo rate would have reduced borrowing costs. Lower rates often encourage more lending and spending, as EMIs become easier to manage and new loans become more attractive.
With the repo rate now left unchanged, borrowers can expect lending rates to remain broadly at current levels for the time being. However, it is important to remember that even with a change, the speed and rate of the interest rate transmission depend on individual lenders. Some lenders may also use benchmarks that are not directly linked to the repo rate, such as the Retail Prime Lending Rate (RPLR).
While the MPC meets at least four times a year, most personal loans are offered at fixed interest rates. This means they are not immediately impacted by changes in monetary policy. If you have large expenses to manage – such as a wedding, higher education, or ambitious personal or business goals – there is no time like the present to consider applying.
That said, it is always important to make an informed borrowing decision. A few simple steps can help you manage your loan responsibly:
By combining timely borrowing with careful planning, you can meet current needs without putting unnecessary pressure on your future finances.
The RBI’s decision to keep the repo rate unchanged at 5.50% means lending rates are likely to remain steady in the near term. For borrowers, this offers stability and clarity when planning big expenses.
If you’re considering financing options, SMFG India Credit offers personal loans of up to INR 30 lakhs* at attractive interest rates starting from 13%* per annum. With flexible tenures, an easy online application process, and minimal personal loan documents, your borrowing journey becomes even more convenient.
Use our personal loan eligibility calculator to estimate your borrowing capacity and apply online today!
* Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG India Credit. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG India Credit's policy at the time of loan application. If you wish to know more about our products and services, please contact us
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