Bangalore: The Repo rate, that refers to the rate at which banks borrow from the apex bank, has been increased by RBI, from 6.25 percent to 6.50 percent and the reverse repo rate, the rate at which RBI borrows from the banks, from 5.25 percent to 5.50 percent. An increase of 25 basis points each has made money making even more expensive for banks. This may result in banks increasing their lending rates for effective transmission of the monetary policy. Joseph Thomas, Head-Investment Advisory and Financial Planning, Aditya Birla Money, says, "I don't think banks will hike interest rates immediately. Rates have already gone up and loans are already expensive. Even deposit rates are high." Most bankers agree that there is an upward bias in rates and they don't expect immediate change in loan rates. However, banks may start hiking rates on loans as well as fixed deposits in a month or so. "This 25 bps hike is small. Had it been 50 bps, there was a possibility of an immediate hike in real rates," said Thomas. In case fixed deposits and loan rates do go up in a month, Ranjit Daani, a certified financial planner advises saying the people should defer their plan to take a car or a personal loan by six months and instead of taking a personal loan, they should look for a top-up loan or sell some investments. As a senior citizen or a pensioner, FDs are also good options. But for those individuals who don't want to pay tax on earnings from FD, it's a good time to look into debt funds as short-term income plans are currently giving half to one percentage points higher returns than FDs. In spite of all the rate hikes, the hike may not mean much to the home loan borrowers. Says Gaurav Mashruwala, a Mumbai-based certified financial planner, "Fixed interest rate home loans are too expensive. If you are looking for a home loan which will run more than a decade, you will see several interest rate cycles. So, it does not matter if you go in for a floating home loan now. If you've already identified a property and documents are in place, it's alright to go for a home loan now."