New Delhi, Feb. 14 -- Loan repayment is one of the many aspects affected by inflation. It affects purchasing power of money, interest rates and overall cost of borrowing. For borrowers, inflation can have both positive and negative consequences, depending on factors such as the type of loan, interest rate structure, and economic conditions.

Inflation is the increase in price of goods and services over time thus decreasing the buying power of money. Monetary policies of the Reserve Bank of India are used to control inflation by changing interest rates. Hence, these adjustments affect loan repayment for borrowers.

As inflation rises, interest rates of banks and NBFCs also rise, as a result, increasing the cost of borrowing. This way, it b...