A "low interest" loan shouldn't mean you have very little interest in paying it back!
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
For short-term loans, the State Bank of India has hiked its Marginal Cost of Funds-based Lending Rate (MCLR) by ten basis points (bps). The revised rates will take effect on 15 August 2022. While The one-year MCLR rate has been revised at 7.70% p.a. the one-month, two-month, and three-month rates have all had rate hikes. The Equated Monthly Instalments (EMIs) on house loans connected to the MCLR would be reduced as a result of this.
| Tenor | SBI MCLR Rates |
| Overnight | 7.35% |
| One Month | 7.35% |
| Three Month | 7.35% |
| Six Month | 7.65% |
| One Year | 7.70% |
| Two Years | 7.90% |
| Three Years | 8.00% |
Switching to a MCLR to a base rate system primarily involves two steps.
As house loan interest rates are tied to the MCLR, new borrowers will be required to pay the new rate, but existing borrowers will be able to keep their current rate until the reset clause is stated. The bank resets the rate of interest on most MCLR-linked house loans only every 6-12 months, depending per the agreement between the bank and the consumer. The rate of interest linked with the new MCLR becomes the new rate once the reset clause is invoked. The revised rate will serve as the standard for calculating future Equated Monthly Instalments (EMI) for existing borrowers. However, in order to lessen the burden of interest, frequent partial prepayments might be made.
| Revised Date | Overnight MCLR | 1 month MCLR | 3 month MCLR | 6 month MCLR | 1 year MCLR | 2 year MCLR | 3 year MCLR |
| 15 August 2022 | 7.35% | 7.35% | 7.35% | 7.65% | 7.70% | 7.90% | 8.00% |
| 15 June 2022 | 7.05% | 7.05% | 7.05% | 7.35% | 7.40% | 7.60% | 7.70% |
| 15 April 2022 | 6.75% | 6.75% | 6.75% | 7.05% | 7.10% | 7.30% | 7.40% |
| 15 March 2022 | 6.65% | 6.65% | 6.65% | 6.95% | 7.00% | 7.20% | 7.30% |
| 15 February 2022 | 6.65% | 6.65% | 6.65% | 6.95% | 7.00% | 7.20% | 7.30% |
| 15 January 2022 | 6.65% | 6.65% | 6.65% | 6.95% | 7.00% | 7.20% | 7.30% |
| 15 December 2021 | 6.65% | 6.65% | 6.65% | 6.95% | 7.00% | 7.20% | 7.30% |
| 15 November 2021 | 6.65% | 6.65% | 6.65% | 6.95% | 7.00% | 7.20% | 7.30% |
| 15 October 2021 | 6.65% | 6.65% | 6.65% | 6.65% | 7.00% | 7.20% | 7.30% |
| 10 September 2021 | 6.65% | 6.65% | 6.65% | 6.95% | 7.00% | 7.20% | 7.30% |
| 10 August 2021 | 6.65% | 6.65% | 6.65% | 6.95% | 7.00% | 7.20% | 7.30% |
| 10 July 2021 | 6.65% | 6.65% | 6.65% | 6.95% | 7.00% | 7.20% | 7.30% |
| 10 June 2021 | 6.65% | 6.65% | 6.65% | 6.95% | 7.00% | 7.20% | 7.30% |
| 10 May 2021 | 6.65% | 6.65% | 6.65% | 6.95% | 7.00% | 7.20% | 7.30% |
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