The RBI interest rate decision on February 6, 2026, left the repo rate unchanged at 5.25%. Your EMI isn’t going up. It’s not going down either. And depending on your loan type, that news hits very differently.
Let me walk you through what really happened, what it means for your pocket, and what you should probably be doing about your loan this month.
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The RBI Interest Rate Decision of February 2026: The Day Nothing Changed
I remember sitting and watching the RBI interest rate decision live. Half of Twitter was convinced there’d be another rate cut. My own cousin called me the night before, asking whether he should wait to take his home loan.
I told him I genuinely had no idea. And I was right to say that.
Governor Sanjay Malhotra came out and basically said – we’re holding at 5.25%. No cut, no hike. The whole Monetary Policy Committee voted to keep things exactly as they were, except one member, Professor Ram Singh, who wanted to shift the stance to something called accommodative. He was outvoted but made his point.
Here’s the thing people forget – the RBI had already cut rates in December 2025. Dropped from 5.50% down to 5.25%. That was a big deal. And February’s RBI interest rate decision was really just them saying let’s see if that cut is actually doing its job before we do anything else.
Makes sense when you think about it. You don’t take a second painkiller 20 minutes after the first one just because your headache hasn’t gone yet. You wait.
Repo rate: 5.25%. SDF rate that banks earn when they park money with RBI: 5.00%. MSF rate emergency borrowing window for banks: 5.50%. All unchanged.
What Is the Repo Rate in This RBI Interest Rate Decision: Why Does Your EMI Care?
Okay look, I’ve explained this to relatives at dinner tables more times than I can count. So let me just say it plainly.
RBI is basically the bank for all banks. When SBI or HDFC needs funds, they come to RBI and borrow at whatever the repo rate is – right now 5.25%. That’s the cost of getting money.
Then they turn around and lend to you and me at 8%, 9%, sometimes higher. The gap is their margin.
So when the RBI reduces the repo rate, banks’ cost of borrowing goes down. In theory, they pass that saving on to you. In theory.
In practice? Banks are slow about it. After the December 2025 cut, a lot of banks sat on their hands for weeks before revising rates. But that’s genuinely how it works – there’s always a lag.
The ones who got the fastest benefit were borrowers with repo-rate-linked home loans, because those are required by the RBI to be revised every three months. MCLR-linked loans are slower – banks have more flexibility there.
RBI Interest Rate Decision Impact on Your Home Loan EMI: Real Numbers
This is what most people actually want to know, so I’ll stop stalling.
Say you have a home loan of ₹40 lakhs, 20-year tenure, at 8.5% interest. Your monthly EMI works out to roughly ₹34,700.
Now here’s something most people are totally unaware of – the CD ratio. Credit-Deposit ratio. Right now in India, it’s sitting around 81.7%, which is quite high. Basically, banks have lent out a huge chunk of the money they’ve collected as deposits. That leaves them less room to aggressively cut lending rates even when the RBI does.
So if your bank is slow to pass on the cut – that’s actually part of why. They’re not just being lazy, well, sometimes they are. But the CD ratio situation is real and it affects how fast rate benefits reach you.
How the RBI Interest Rate Decision Affects Car Loans and Personal Loans
Home loans and car loans don’t work the same way, and this trips people up all the time.
Car loans are almost always linked to MCLR – Marginal Cost of Funds-based Lending Rate. MCLR doesn’t move as quickly as the repo rate because it depends on the bank’s entire cost of funds, not just what they borrow from the RBI.
So if you took a car loan last year and you’re expecting your EMI to drop dramatically – don’t hold your breath. It’ll adjust, but slowly. Maybe over the next few months as the December cut filters through.
That said, we’re clearly in a falling rate environment. Inflation is at 2.1% for FY26 – that’s very low, well below RBI’s own 4% target. Rates aren’t going back up anytime soon. So if you need a car loan in 2026, the overall environment is much better than it was back in 2023 when rates were a lot higher.
My honest advice? If the EMI fits your life right now, just get the loan. Waiting for another 25 bps cut to save ₹300-500 per month isn’t worth putting a major decision on hold for six months.
Neutral Stance: What Does the RBI Interest Rate Decision Actually Signal?
Every RBI announcement comes with what they call a stance – and this time they kept it neutral.
Neutral basically means: we’re not promising cuts, we’re not promising hikes. We’ll see what happens.
Compare that to accommodative, which would be RBI essentially signaling yeah, more cuts are coming. That’s what Professor Ram Singh was pushing for in February. He didn’t win that argument, but the fact he’s consistently making the case tells you something – the internal thinking at RBI isn’t settled on this.
With inflation at 2.1% and GDP growth looking solid at 7.4% for FY26, on paper there’s room for another cut. But the rupee has been under pressure – sitting near ₹90 to the dollar, which is uncomfortable territory. Global trade is unpredictable. And RBI wants to be sure the December cut is actually flowing through the system properly.
My gut feeling – there’s probably another 25 bps cut coming, maybe April or June 2026. But I’ll be the first to admit I’ve been wrong about RBI timelines before. Everyone has.
After the RBI Interest Rate Decision – Should You Prepay Your Loan or Let It Run?
I get asked this constantly. The answer is genuinely it depends, but here’s how I actually think through it for people.
Pay it down early if you’ve got a lump sum parked in a savings account or FD earning less than your loan rate. Home loan at 8.5%, FD at 7%? Prepaying makes more mathematical sense. You’re effectively earning 8.5% risk-free by reducing debt.
Don’t rush to prepay if your loan rate is below 7.5% and you’re someone who can actually stay disciplined with investing. Long-term equity mutual funds have historically returned 11-12% annually. In that case, the math favors investing over prepaying.
Look into switching your loan type if you’re still on MCLR and haven’t explored moving to a repo-rate-linked product. In this rate environment, repo-linked loans adjust faster to cuts. Banks usually charge a small fee to switch, but over a 15-20 year tenure, it often pays off.
One thing I cannot stress enough – check for prepayment penalties before you dump any lump sum into your loan. Fixed-rate loans almost always have them. Floating rate loans usually don’t, but always verify.
What the RBI Interest Rate Decision Means If You’re Planning to Buy a House
Actually, a stable rate environment is underrated good news for home buyers.
When rates are swinging around – up one meeting, down the next – nobody can plan. Developers can’t price their projects with confidence. Banks get conservative with approvals. And buyers like you end up in wait-and-watch mode indefinitely.
But when things are steady at 5.25%, everyone – banks, developers, buyers – can actually make decisions.
The RBI itself noted that mid-income and affordable housing demand should stay resilient through this period. First-time buyers especially benefit here. You know roughly what your EMI will be. You’re not gambling on whether rates spike by ₹4,000 six months from now.
Next RBI Interest Rate Decision Date – Mark Your Calendar
MPC meets six times a year. The February 6 meeting just wrapped up and it was the last one of FY26.
Next up is April 2026 – first meeting of FY27. That one is genuinely important for a few reasons. The government is expected to release a revised GDP measurement series, which could change how India’s economic size is calculated. RBI will also give projections for the full FY27. And we’ll have clearer inflation data for the first quarter.
If another rate cut is coming, April feels like the most likely moment. Keep an eye out.
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FAQs on the RBI Interest Rate Decision 2026
Will the RBI Interest Rate Decision Bring Another Rate Cut in 2026?
Possibly yes – inflation at 2.1% is well below RBI’s 4% target, which creates room for a cut. The neutral stance means nothing is guaranteed, but April 2026 is the next meeting where it could happen.
How Does the RBI Interest Rate Decision Affect My Home Loan EMI?
If your home loan is linked to an external benchmark, which most new loans are, it adjusts every three months. A 0.25% rate drop on a ₹40 lakh, 20-year loan saves roughly ₹500 per month – around ₹1.2 lakh total over the full tenure.
What Stance Did the RBI Interest Rate Decision 2026 Maintain?
Neutral. That means no commitment to cut or hike – the committee will decide based on incoming inflation and growth data.
After the RBI Interest Rate Decision, Should I Switch from MCLR to Repo-Linked?
In a falling rate cycle, repo-linked loans benefit faster. If your remaining tenure is 10+ years, switching usually makes financial sense even after paying the bank’s switching fee. Always ask your bank for a side-by-side EMI comparison.
Is 2026 a Good Time for a Home Loan After the RBI Interest Rate Decision?
Compared to 2022-2023, yes, rates are meaningfully lower. If the EMI works within your monthly budget, there’s no strong reason to delay just to wait for another small cut.
What Are the SDF and MSF Rates After the RBI Interest Rate Decision?
SDF where banks park excess funds with RBI: 5.00%. MSF emergency borrowing by banks from RBI: 5.50%. Both are unchanged from December 2025.
