Good News for SBI Home Loan Borrowers: EMI to Decrease

The State Bank of India (SBI) has announced a reduction in interest rates for home loan borrowers, bringing relief to customers paying Equated Monthly Installments (EMIs). The bank has revised its External Benchmark-Based Lending Rate (EBLR) and Repo Linked Lending Rate (RLLR), with the new rates coming into effect from the 15th of this month. SBI stated that this decision would ease the financial burden on borrowers.

The move follows the Reserve Bank of India’s (RBI) decision to cut the repo rate by 25 basis points to 6.25%. SBI clarified that in response to this revision, it has adjusted its lending rates accordingly.

However, the bank confirmed that there would be no changes in the Marginal Cost of Funds Based Lending Rate (MCLR) or the Base Rate (BPLR). SBI has been following the EBLR system since October 1, 2019, to link home loan interest rates to the RBI’s repo rate. Consequently, any changes in the repo rate directly impact the interest rates of linked loans.

As a result, when the repo rate decreases, the EMIs on home loans, personal loans, and other loans linked to the EBLR are reduced, benefiting borrowers.