RBI likely to cut loan EMIs again: When can you expect cheaper loans?

New Delhi (The Uttam Hindu) : Reassuring news continues to emerge for homebuyers and consumers paying hefty home loan EMIs. Following the December 2025 monetary policy relief, borrowers are now expected to see further easing in February 2026. There are indications that the Reserve Bank of India may cut interest rates again. However, this could have a negative impact on fixed deposit investors, as lower rates are expected to reduce returns.

Repo rate may be cut again in February

According to the latest detailed report of Union Bank of India, RBI may maintain its accommodative stance in the Monetary Policy Committee (MPC) meeting to be held in February 2026. The report estimates that a further cut of 25 basis points (0.25%) in the repo rate is possible. Currently the repo rate is at 5.25%. If this estimate proves correct, the rate will come down to 5%. This will directly benefit those taking home loans, car loans and personal loans – interest rates of banks will decrease and the monthly installment (EMI) will be reduced, which will increase savings in the household budget.

Inflation is under control, hence relief is being received

According to the report, inflationary pressure is now largely under control. The pace of price rise has slowed down, which is giving RBI an opportunity to ease rates. The analysis also says that if the approximately 0.50% inflation increased due to the rise in gold prices is excluded, then the actual inflation rate appears to be even lower. However, the meeting of February 2026 may be somewhat challenging for RBI, because during that time a change in the base year of CPI and GDP is proposed. The data coming on the new parameters may influence the policy decisions.