If you have taken a home loan from the State Bank of India (SBI), there’s great news for you! The Reserve Bank of India (RBI) has recently announced a reduction in the repo rate, providing relief to millions of borrowers. Previously set at 6.50%, the repo rate has now been lowered to 6.25%.
Following this decision, SBI has also reduced its lending rates, benefitting customers with home loans, personal loans, and other retail loans. Let’s explore how this change can help borrowers.
SBI Lowers Lending Rates
With the reduction in the repo rate, SBI has also announced a cut in its external benchmark-based lending rate (EBLR) and repo-linked lending rate (RLLR). This means that interest rates on home loans and personal loans will decrease, making borrowing more affordable.
Impact of the Repo Rate Cut
- The repo rate has been reduced from 6.50% to 6.25%.
- As a result, SBI has lowered its interest rates on various loan products.
- The new interest rates will be applicable from February 15, 2025.
- However, there are no changes to MCLR, the base rate, or the benchmark prime lending rate.
Reduction in EBLR
- Previously, EBLR was 9.15% + CRP + BSP, which has now been reduced to 8.90% + CRP + BSP.
- Customers with loans linked to EBLR—such as home loans, personal loans, and other retail loans—will benefit from lower interest rates.
- This means a reduction in EMI payments or a faster loan repayment period.
RLLR Also Reduced
- SBI has lowered RLLR from 8.75% + CRP to 8.50% + CRP.
- Since RLLR is directly linked to the RBI’s repo rate, borrowers experience an immediate impact from these changes.
- Customers whose loans are tied to RLLR will now be able to repay their loans at a lower interest rate, benefiting home loan and business loan borrowers significantly.
Lower Interest Rates Lead to Reduced EMI
- Home loan EMIs will decrease following SBI’s interest rate reduction.
- Customers with longer loan tenures may see a relief of up to 1.8%.
No Change in MCLR and Base Rate
- SBI has not altered its MCLR, base rate, or benchmark prime lending rate.
- Borrowers with loans linked to MCLR will not experience any reduction in interest rates at this time.
- However, they can switch their loans to EBLR or RLLR to take advantage of lower rates.
Key Takeaway
Customers with home loans and personal loans from SBI will directly benefit from the interest rate reduction if their loans are linked to EBLR or RLLR. Those with loans tied to MCLR should consider transferring to EBLR or RLLR to take advantage of lower EMI payments.
Disclaimer: This article is for informational purposes only. Please verify the details with official sources before making financial decisions.