Can my EMI change every month?
No. Reset period (usually 3 or 6 months) decides when bank can change rate. EMI same, tenure adjusts; if tenure crosses bank cap (say 30 years) then EMI rises. Example: RLLR loan resets quarterly; new repo rate effective 1st day of next quarter.
When I first took a floating-rate home loan, I was surprised to learn about the term “reset period” — it’s one of those details that can quietly make a big difference in your EMIs over time.
What Is the Reset Period in a Floating Loan?
The reset period refers to the interval at which your lender reviews and adjusts the interest rate on your floating-rate loan based on changes in the benchmark rate (like the Repo Rate or MCLR). For example, if your reset period is six months, your loan interest rate will be revised every six months according to the latest benchmark.
Why It Matters?
A shorter reset period (say, 3 or 6 months) means your loan rate reacts faster to changes in market interest rates — both increases and decreases. On the other hand, a longer reset period (like 1 year) gives you more stability for a while, but it might delay the benefit if rates fall.
Typical Reset Periods
Most banks in India use a 6-month or 1-year reset period for floating-rate home loans. However, it varies by lender and the loan agreement, so it’s always wise to check your loan sanction letter or discuss it with your bank directly.
Official Source:
You can read more about floating-rate loans and reset periods on the Reserve Bank of India’s official website here: