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Rate cut not passed on, or tenure extended without asking?

Rules checked 13 October 2026

Ask your lender for a written history of every rate reset on your loan. Banks must reset repo-linked loans at least every three months, and can't raise your spread at will: the credit-risk part changes only if your credit profile changes substantially, and other parts at most once every three years. If a cut wasn't applied, or your tenure was stretched without telling you, write to the lender, and escalate to the RBI Ombudsman if it isn't fixed within 30 days.

1Your rights

  • Repo-linked (external benchmark) loans from banks: under RBI's directions, the rate has to be reset at least once every three months. The credit-risk part of the spread can change only if your credit assessment substantially changes, as agreed in your loan contract; other parts of the spread (like operating cost) can be raised at most once every three years. Banks are allowed to reduce them sooner. Loans from NBFCs and housing finance companies don't have to be repo-linked: check your agreement for the benchmark and reset dates.
  • MCLR loans: the rate resets on the dates set in your loan agreement (often every 6 or 12 months), following the lender's MCLR.
  • At every reset (RBI's August 2023 rules): the lender should clearly tell you the effect on your EMI and tenure, and give you the choice of a higher EMI, a longer tenure, or both. It should also allow you to prepay at any time. Offering a switch to a fixed rate is optional for lenders since October 2025.
  • Statements: you should get a quarterly statement showing the interest rate, EMI and remaining tenure.
  • Switching to a lower rate: older MCLR or base-rate loans can usually be moved to the lender's current repo-linked rate, often for a small conversion fee.

2What your lender can say no to

  • A cut reaches your loan only at your reset date, not on the day RBI announces it. Check your reset dates before assuming it was missed.
  • Moving to a lower rate for new customers isn't automatic. Lenders may charge a conversion fee or offer a rate based on your current profile.
  • If your loan is on a fixed rate, benchmark changes don't apply during the fixed period.

3Before you write

  1. Find your benchmark and reset dates in your sanction letter or loan agreement: repo-linked (EBLR), MCLR or fixed.
  2. Compare your last few statements: did the rate change after the benchmark changed? Did the number of EMIs left jump?
  3. Work out the effect with the home loan EMI calculator. If your tenure was stretched, see what raising the EMI saves with the reduce EMI or tenure calculator.
  4. Know your alternative: if your lender won't match today's rates, a balance transfer may save more.

4Create your letter

Fill in your details to get a ready letter, quoting the relevant rules, that you can send to your lender.

What you type stays on your device. Nothing is sent to LoanReveal or your lender until you send the letter yourself.

5Send it so you have proof

The letter itself isn't proof. What the RBI Ombudsman, a consumer forum or a court will want to see is proof that the lender received it, and that depends on how you send it:

  • Hand it in at the branch, with a second copy

    Very strong

    The lender's "received" stamp, signature and date on your copy (use the acknowledgement box on the printed letter)

  • Registered Post or Speed Post

    Very strong

    The postal receipt, and the delivery record from India Post tracking

  • Email to the lender's official grievance address

    Strong

    Your sent email with date and time, the lender's auto-reply, and any complaint ticket number. Keep the original emails, not just screenshots.

  • The lender's online complaint form or app

    Strong

    The complaint reference number and confirmation. Save the confirmation page, email or SMS.

  • Phone call, or speaking at the branch

    Weak

    Usually nothing you can show later. Always follow up in writing.

Keep everything together: your letter, proof of sending, the lender's replies and your loan documents. LoanReveal doesn't keep copies of your letters, so we can't confirm what you sent; the lender's stamp, the postal record or the lender's reference number is your proof. For court proceedings, electronic records such as emails may need extra formalities: ask a lawyer.

6If it isn't resolved: escalate

If the lender doesn't reply within 30 days, or doesn't correct a reset that wasn't done as the rules and your agreement require, you can complain to the RBI Ombudsman. Attach your loan agreement or sanction letter, your statements, and your letter to the lender. Ask for the rate to be corrected from the due date and for any excess interest to be adjusted.

  1. Write to the lender (steps 4 and 5). If there's no reply, or you're not satisfied, write to its Principal Nodal Officer, whose details are on its website.
  2. After 30 days without a satisfactory reply, file a free complaint with the RBI Ombudsman at cms.rbi.org.in, attaching your letter, the lender's reply (if any) and your loan documents.

7Keep a case file

Record every step: when you wrote, how it was delivered, reference numbers and replies. Download it as a dated PDF timeline with a checklist of documents to attach, ready for the RBI Ombudsman, a consumer forum or a lawyer.

Add a step

Next: Add the date you sent your letter to start the record.

Frequently asked questions

Why hasn't the repo rate cut reduced my EMI yet?

It reaches your loan only at your next reset date. For repo-linked loans that's at least every three months; for MCLR loans it's usually every 6 or 12 months. Many lenders also keep the EMI the same and shorten the tenure instead.

Can my bank increase my tenure without asking me?

RBI's rules require lenders to explain the impact of a reset clearly and give you the choice of a higher EMI, a longer tenure or both. If your tenure was extended without that, ask in writing for an explanation and for your preferred option.

Can the bank increase the spread on my repo-linked loan?

For bank loans linked to the repo rate, the credit-risk part of the spread can change only if your credit assessment substantially changes, as agreed in your loan contract. Other parts of the spread, such as operating cost, can be changed at most once every three years. If your spread went up without either reason, ask the bank in writing to explain.