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State Bank of India was one of the first banks in the country to announce the new Marginal Cost-Based Lending Rate (MCLR) on April 1st, 2016. MCLR is the benchmark lending rate of a bank. A bank cannot lend to anyone below this rate.
| Tenor | SBI MCLR Rates |
|---|---|
| Overnight | 7.75% |
| 1 Month | 7.85% |
| 3 Month | 7.90% |
| 6 Month | 7.95% |
| 1 Year | 8.00% |
| 2 Years | 8.10% |
| 3 Years | 8.15% |
State Bank of India has dropped their interest rates on SBI Home Loans by 5 basis points to 8.30%. This is now one of the lowest rates of interest for housing loans in the country. The bank has also cut interest rates for auto loans, now offering them at 8.70%.
The slash in interest rates by SBI has caused other lenders to drop their lending rates as well. A statement made by SBI said that these rates were effective from the 1st of November, and the reduction in rates is a direct repercussion of the drop in MCLR ( Marginal Cost-Based Lending Rate) a few days earlier. Prior to this, the bank had cut MCLR by 0.9% on January 1st of this year.
For all housing loans for salaried individuals up to Rs.30 lakh, the rate of interest would be 8.30% p.a. Besides this, an eligible housing loan borrower can avail a discount of Rs.2.67 lakh as per PMAY (Pradhan Mantri Awas Yojana) scheme.
Switching to a MCLR to a base rate system primarily involves two steps.
The Equated Monthly Instalments (EMI) will not immediately drop for an existing borrower. He/she will still have to pay the existing rate of interest. However, a borrower can reduce the burden of interest by making regular partial prepayments.
| Type of Loan | SBI Interest Rates |
|---|---|
| Home loan | 8.30% floating rate of interest |
| Loan against property | 9.40% floating rate of interest |
| Personal Loan | 12.50% |
| Fixed deposit | 5.25% - 6.25% |
| Revised Date | Overnight MCLR | 1 month MCLR | 3 month MCLR | 6 month MCLR | 1 year MCLR | 2 year MCLR | 3 year MCLR |
|---|---|---|---|---|---|---|---|
| 1st Nov 2017 | 7.70% | 7.80% | 7.85% | 7.90% | 7.95% | 8.05% | 8.10% |
| 1st Oct 2017 | 7.75% | 7.85% | 7.90% | 7.95% | 8.00% | 8.10% | 8.15% |
| 1st Sep 2017 | 7.75% | 7.85% | 7.90% | 7.95% | 8.00% | 8.10% | 8.15% |
| 1st Aug 2017 | 7.75% | 7.85% | 7.90% | 7.95% | 8.00% | 8.10% | 8.15% |
| 1st Jul 2017 | 7.75% | 7.85% | 7.90% | 7.95% | 8.00% | 8.10% | 8.15% |
| 1st Jun 2017 | 7.75% | 7.85% | 7.90% | 7.95% | 8.00% | 8.10% | 8.15% |
| 1st May 2017 | 7.75% | 7.85% | 7.90% | 7.95% | 8.00% | 8.10% | 8.15% |
| 1st Apr 2017 | 7.75% | 7.85% | 7.90% | 7.95% | 8.00% | 8.10% | 8.15% |
| 1st Mar 2017 | 7.75% | 7.85% | 7.90% | 7.95% | 8.00% | 8.10% | 8.15% |
| 1st Feb 2017 | 7.75% | 7.85% | 7.90% | 7.95% | 8.00% | 8.10% | 8.15% |
| 1st Jan 2017 | 7.75% | 7.85% | 7.90% | 7.95% | 8.00% | 8.10% | 8.15% |
| 1st Dec 2016 | 8.65% | 8.75% | 8.80% | 8.85% | 8.90% | 9.00% | 9.05% |
| 1st Nov 2016 | 8.65% | 8.75% | 8.80% | 8.85% | 8.90% | 9.00% | 9.05% |
| 1st Oct 2016 | 8.65% | 8.75% | 8.80% | 8.85% | 8.90% | 9.00% | 9.05% |
| 1st Sep 2016 | 8.85% | 8.95% | 9.00% | 9.05% | 9.10% | 9.20% | 9.25% |
| 1st Aug 2016 | 8.85% | 8.95% | 9.00% | 9.05% | 9.10% | 9.20% | 9.25% |
| 1st Jul 2016 | 8.90% | 9.00% | 9.05% | 9.10% | 9.15% | 9.25% | 9.30% |
| 1st Jun 2016 | 8.90% | 9.00% | 9.05% | 9.05% | 9.15% | 9.25% | 9.30% |
| 1st May 2016 | 8.90% | 9.00% | 9.05% | 9.05% | 9.15% | 9.25% | 9.30% |
GST Rate of 18% Applicable for All Financial Services Effective July 1, 2017.
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The State Bank of India has decided to increase the MCLR rates for all tenures by 10 basis points which equates to a 0.10% increase effective from June 1, 2018. Increase in Marginal Cost of Lending Rate or MCLR would mean that the person applying for the home loan will have to pay a higher interest rate until SBI decides to decrease the margin on loans to negate it. The RBI is set to lay down its bi-monthly monetary policy on June 6. The MCLR rates have been increased for the second time in under a year. The last increase was made in March.
For the people who have already taken a home loan, the hike in the MCLR rates will change the EMI to be paid. It will depend on when the reset date is. A reset date is a point in time from when the interest rate is adjusted for the borrower which is usually 6 months or a year. The new EMI amount to be paid will be determined based on the margin that will come into effect from the reset date and the new MCLR rates set by the bank.
4 June 2018
Soon after hiking its marginal cost of funds-based lending rates (MCLR) by up to 25 basis points (bps), the State Bank of India – India’s largest bank – has increased its base rate (BR) and benchmark prime lending rate (BPLR) by 5 bps with effect from April 1, 2018.
On the other hand, Allahabad Bank has announced reduction in its lending rates with effect from April 2, 2018. While it has lowered its base rate to 9.15%, its BPLR has been cut to 13.40% from 13.85 per annum. This seems to be both bad and good news for customers. While SBI loans may become costlier going ahead, the EMIs may come down in the case of Allahabad Bank for its loans linked to the base rate. Some industry experts, however, said that the current changes in the base rates do not seem to be aimed at making the loans costlier or cheaper. Instead banks seem to be aliening their base rates to their MCLR as both are slated to be linked now, as per the RBI policy.
16 April 2018
