Bank of India raises RBLR to 8.35%: car-loan EMI checks

Bank of India has raised its Repo Based Lending Rate (RBLR) by 25 basis points to 8.35% from 8.10%, following the Reserve Bank of India’s 7 Oct 2026 repo-rate hike. The move can affect eligible floating-rate vehicle borrowers, but it does not automatically change every Bank of India car-loan EMI because the final rate, benchmark and reset clause depend on the loan agreement.

Moneycontrol and Business Upturn reported the lender’s change on 7 Oct 2026, citing the bank’s regulatory filing. This is a material follow-up to FuelPrice’s earlier RBI repo-rate and car-loan EMI update: the new development is the lender-level pass-through to its own benchmark.

Key takeaways

Bank of India’s RBLR rose by 25 bps to 8.35% from 8.10%, effective 7 Oct 2026, according to reports citing the bank’s filing.
The RBLR’s repo component moved from 5.25% to 5.50%, while the reported 2.85% markup stayed unchanged.
Only loans linked to the bank’s repo-based benchmark are directly in scope; fixed-rate loans or loans linked to another benchmark may follow different rules.
Illustratively, a ₹10 lakh loan for 60 months at 8.10% versus 8.35% changes the EMI by about ₹120 per month. This is not a personal quote.
Borrowers need to check the loan agreement’s benchmark, spread, reset date, EMI-versus-tenure choice and updated statement.

What Bank of India changed

The reported revision has three moving parts. The RBI repo component increased from 5.25% to 5.50% on 7 Oct 2026. Bank of India’s markup was reported as unchanged at 2.85%. Together, those components take the bank’s RBLR from 8.10% to 8.35%, a 25-basis-point increase.

RBLR component	Before 7 Oct 2026	Reported position from 7 Oct 2026
RBI repo component	5.25%	5.50%
Bank of India markup	2.85%	2.85%
Effective RBLR	8.10%	8.35%

The figures above are annual interest rates and are dated to the 7 Oct 2026 revision. The official Bank of India retail-loan schedule dated 1 Jun 2026 also states that floating rates are linked to RBLR or MCLR, depending on the product. That distinction matters because a benchmark change is not the same as a universal increase in every vehicle-loan rate.

Which vehicle-loan borrowers may be affected

The first line to find in a loan sanction letter or statement is the interest-rate benchmark. A vehicle loan that says RBLR plus a credit-risk premium can move when RBLR moves, subject to the contract’s reset mechanism. A loan linked to MCLR, another external benchmark or a fixed rate has a different transmission path.

Bank of India’s official floating-rate schedule for 1 Jun 2026 lists its Star Vehicle Loan structure for new four-wheelers above ₹5 lakh as RBLR plus a credit-risk premium, with borrower-category discounts and other components. It also says the quoted rate is calculated on a daily reducing balance. Those terms mean the 8.35% RBLR should not be mistaken for the final rate offered to every car buyer.

For an existing borrower, the effect can appear as a higher EMI, a longer remaining tenure or a combination of both. The outcome depends on whether the lender keeps the tenure fixed, keeps the EMI fixed, applies the change at the next reset date or follows another method specified in the contract.

Illustrative EMI effect on a car loan

To show the scale without presenting a personal offer, consider a hypothetical ₹10 lakh principal over 60 months. If the entire loan rate moved from 8.10% to 8.35%, a standard reducing-balance calculation gives the following approximate result:

Illustration	Interest-rate assumption	Approximate EMI
Before the 25-bps move	8.10% per annum for 60 months	₹20,324 per month
After the 25-bps move	8.35% per annum for 60 months	₹20,444 per month
Illustrative difference	0.25 percentage point	About ₹120 per month, or about ₹7,201 across 60 scheduled payments

This calculation uses the two reported RBLR figures as if they were the complete loan rate. Actual Bank of India vehicle-loan pricing can include a credit-risk premium, business-strategy discount, borrower score, loan type and other terms. The actual EMI or tenure impact can therefore be higher, lower or zero for a particular borrower.

What to check in the loan documents

The rate change makes the following checks useful for anyone with an existing Bank of India vehicle loan or a new application in progress:

Benchmark: confirm whether the loan is linked to RBLR, MCLR, an external benchmark or a fixed rate.
Spread and concessions: note the credit-risk premium, borrower-score band, business-strategy discount and any concession shown in the sanction letter.
Reset timing: find the next reset date and the notice or statement process used to communicate the revised rate.
EMI or tenure: check whether the bank changes the monthly instalment, extends the tenure or gives a choice under the contract.
Charges and total cost: compare processing fees, prepayment terms, insurance requirements and the total repayment amount rather than looking only at the benchmark.

FuelPrice’s fixed-versus-floating car-loan guide explains why two borrowers can see different outcomes after the same benchmark move.

What it means for a new car budget

A buyer comparing a vehicle loan needs the final lender quote, not only the RBLR headline. The car’s on-road price, down payment, loan amount, tenure, borrower profile and rate type all change the monthly obligation. Fuel and maintenance remain separate costs; a buyer can use the fuel-cost calculator to estimate running costs alongside the EMI before comparing the total monthly vehicle budget.

There is no confirmed indication in the cited reports that every bank will make the same vehicle-loan adjustment or that every Bank of India borrower will see an immediate EMI increase. The next useful document is the lender’s updated rate sheet and the borrower’s own statement after the applicable reset date. Further rate changes would be separate developments, not a conclusion that all car loans have repriced.