A "low interest" loan shouldn't mean you have very little interest in paying it back!
State Bank of India has revised the Marginal Cost of funds based Lending Rate with effect from 10 July 2020. MCLR is defined as the minimum rate of interest benchmarked by the bank below which the bank cannot lend to the customers.
MCLR rates slashed by SBI across all tenors
State Bank of India has slashed its Marginal Cost of funds-based Lending Rate (MCLR) by 5 to 10 basis points (bps) across for short-term loans. The new rates are effective from 10 July 2020. While the 1-year MCLR rate still stands at 7.00% p.a. (after the 10 June 2020 rate cut), the one month, two months, and three months rates have witnessed the rate cuts. This will bring down the Equated Monthly Instalments (EMIs) on home loans that are linked to the MCLR.
| Tenor | SBI MCLR Rates |
|---|---|
| Overnight | 6.65% |
| 1 Month | 6.65% |
| 3 Month | 6.65% |
| 6 Month | 6.95% |
| 1 Year | 7.00% |
| 2 Years | 7.20% |
| 3 Years | 7.30% |
Switching to a MCLR to a base rate system primarily involves two steps.
State Bank of India, one the leading lenders by assets in the country, has raised the marginal cost of funds based lending rates (MCLR) across tenures by 5 basis points. The revised rates shall be effective immediately. With home loan interest rates linked to the MCLR, the interest rates are expected to go up on the loans. New home loan borrowers will have to pay a higher rate of interest on their loans while existing borrowers can continue paying the same rate until the reset clause is specified. In most MCLR-linked home loans, the bank resets the rate of interest only after 6-12 month as per the agreement between the bank and the customer. Once the reset clause has been activated, the rate of interest associated with the new MCLR becomes the new rate. The new rate will be the benchmark on which the existing borrower’s future Equated Monthly Instalments (EMI) will be computed. However, one can always make regular partial prepayments in order to reduce the burden of interest.
| Revised Date | Overnight MCLR | 1 month MCLR | 3 month MCLR | 6 month MCLR | 1 year MCLR | 2 year MCLR | 3 year MCLR |
|---|---|---|---|---|---|---|---|
| 10 July 2020 | 6.65% | 6.65% | 6.65% | 6.95% | 7.00% | 7.20% | 7.30% |
| 10 June 2020 | 6.70% | 6.70% | 6.75% | 6.95% | 7.00% | 7.20% | 7.30% |
| 10 May 2020 | 6.95% | 6.95% | 7.00% | 7.20% | 7.25% | 7.45% | 7.55% |
| 10 April 2020 | 7.10% | 7.10% | 7.15% | 7.35% | 7.40% | 7.60% | 7.70% |
| 10 March 2020 | 7.45% | 7.45% | 7.50% | 7.70% | 7.75% | 7.95% | 8.15% |
| 10 February 2020 | 7.60% | 7.60% | 7.65% | 7.80% | 7.85% | 8.05% | 8.15% |
| 10 January 2020 | 7.65% | 7.65% | 7.70% | 7.85% | 7.90% | 8.10% | 8.20% |
| 10 December 2019 | 7.65% | 7.65% | 7.70% | 7.85% | 7.90% | 8.10% | 8.20% |
| 10 March 2019 | 8.20% | 8.20% | 8.25% | 8.40% | 8.55% | 8.65% | 8.75% |
| 10 February 2019 | 8.20% | 8.20% | 8.25% | 8.40% | 8.55% | 8.65% | 8.75% |
| 10 January 2019 | 8.20% | 8.20% | 8.25% | 8.40% | 8.55% | 8.65% | 8.75% |
| 10 December 2018 | 8.20% | 8.20% | 8.25% | 8.40% | 8.55% | 8.65% | 8.75% |
| 01 November 2018 | 8.15% | 8.15% | 8.20% | 8.35% | 8.50% | 8.60% | 8.70% |
| 01 October 2018 | 8.15% | 8.15% | 8.20% | 8.35% | 8.50% | 8.60% | 8.70% |
| 01 September 2018 | 8.10% | 8.10% | 8.15% | 8.30% | 8.45% | 8.55% | 8.65% |
| 01 August 2018 | 7.90% | 7.90% | 7.95% | 8.10% | 8.25% | 8.35% | 8.45% |
| 01 July 2018 | 7.90% | 7.90% | 7.95% | 8.10% | 8.25% | 8.35% | 8.45% |
| 01 June 2018 | 7.90% | 7.90% | 7.95% | 8.10% | 8.25% | 8.35% | 8.45% |
| 01 May 2018 | 7.80% | 7.80% | 7.85% | 8.00% | 8.15% | 8.25% | 8.35% |
| 01 April 2018 | 7.80% | 7.80% | 7.85% | 8.00% | 8.15% | 8.25% | 8.35% |
| 01 March 2018 | 7.80% | 7.80% | 7.85% | 8.00% | 8.15% | 8.25% | 8.35% |
| 01 February 2018 | 7.70% | 7.80% | 7.85% | 7.90% | 7.95% | 8.05% | 8.10% |
| 01 January 2018 | 7.70% | 7.80% | 7.85% | 7.90% | 7.95% | 8.05% | 8.10% |
| 01 December 2018 | 7.70% | 7.80% | 7.85% | 7.90% | 7.95% | 8.05% | 8.10% |
| 01 November 2017 | 7.70% | 7.80% | 7.85% | 7.90% | 7.95% | 8.05% | 8.10% |
| 01 October 2017 | 7.75% | 7.85% | 7.90% | 7.95% | 8.00% | 8.10% | 8.15% |
| 01 September 2017 | 7.75% | 7.85% | 7.90% | 7.95% | 8.00% | 8.10% | 8.15% |
| 01 August 2017 | 7.75% | 7.85% | 7.90% | 7.95% | 8.00% | 8.10% | 8.15% |
| 01 July 2017 | 7.75% | 7.85% | 7.90% | 7.95% | 8.00% | 8.10% | 8.15% |
| 01 June 2017 | 7.75% | 7.85% | 7.90% | 7.95% | 8.00% | 8.10% | 8.15% |
| 01 May 2017 | 7.75% | 7.85% | 7.90% | 7.95% | 8.00% | 8.10% | 8.15% |
| 01 April 2017 | 7.75% | 7.85% | 7.90% | 7.95% | 8.00% | 8.10% | 8.15% |
| 01 March 2017 | 7.75% | 7.85% | 7.90% | 7.95% | 8.00% | 8.10% | 8.15% |
| 01 February 2017 | 7.75% | 7.85% | 7.90% | 7.95% | 8.00% | 8.10% | 8.15% |
| 01 January 2017 | 7.75% | 7.85% | 7.90% | 7.95% | 8.00% | 8.10% | 8.15% |
| 01 December 2016 | 8.65% | 8.75% | 8.80% | 8.85% | 8.90% | 9.00% | 9.05% |
| 01 November 2016 | 8.65% | 8.75% | 8.80% | 8.85% | 8.90% | 9.00% | 9.05% |
| 01 October 2016 | 8.65% | 8.75% | 8.80% | 8.85% | 8.90% | 9.00% | 9.05% |
| 01 September 2016 | 8.85% | 8.95% | 9.00% | 9.05% | 9.10% | 9.20% | 9.25% |
| 01 August 2016 | 8.85% | 8.95% | 9.00% | 9.05% | 9.10% | 9.20% | 9.25% |
| 01 July 2016 | 8.90% | 9.00% | 9.05% | 9.10% | 9.15% | 9.25% | 9.30% |
| 01 June 2016 | 8.90% | 9.00% | 9.05% | 9.05% | 9.15% | 9.25% | 9.30% |
| 01 May 2016 | 8.90% | 9.00% | 9.05% | 9.05% | 9.15% | 9.25% | 9.30% |
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