ALERT! Loan EMIs go higher as SBI hikes loan interest rates by 5-10 basis points
SBI hikes loan interest rates: State Bank of India (SBI), the largest lender in the country, increased the Marginal Cost of Funds-Based Lending Rate (MCLR) by 5-10 basis points across all loan tenures with effect from today i.e. Monday, 15 July 2024.
With the increase in the Marginal Cost of Funds-Based Lending Rate (MCLR), the interest rates on loans are also to rise by a similar measure, and EMIs rise on linked loans.
Effective from today, SBI's MCLR for 5 basis points has been revised to 8.35%, while the three-month MCLR benchmark rate has increased by 10 basis points to 8.40%
Notably, SBI's auto loans are linked to the one-year MCLR, while personal loans are linked to the two-year MCLR.
Borrowers with loans linked to MCLR should anticipate an increase in their Equated Monthly Instalments (EMIs) due to the rate hike.
| Tenor | Existing MCLR (In %) | Revised MCLR (In %) |
| Over night | 8.1 | 8.1 |
| One Month | 8.3 | 8.35 |
| Three Month | 8.3 | 8.4 |
| Six Month | 8.65 | 8.75 |
| One Year | 8.75 | 8.85 |
| Two Years | 8.85 | 8.95 |
| Three Years | 8.95 | 9 |
Most retail loans, such as home and auto loans, are linked to the Marginal Cost of Funds-Based Lending Rate (MCLR).
As SBI increased the Marginal Cost of Funds-Based Lending Rate (MCLR) by 5-10 basis points across all loan tenures, borrowers with loans tied to MCLR to face an increase in their Equated Monthly Instalments (EMIs).
The impact of increase in SBI loan rates to be felt based on borrowers' loan reset periods.
After each reset period, typically every one year for one-year MCLR-linked loans and every six months for six-month MCLR-linked loans, the revised MCLR rates will apply to their outstanding loan balances.
- With inputs from agencies
