Synopsis: State Bank of India (SBI) has adjusted its Marginal Cost of Funds-based Lending Rate (MCLR) effective from October 15, 2024. The one-month MCLR rate saw a 25 basis point (bps) reduction, while all other tenures remain unchanged.
State Bank of India (SBI), the largest public-sector bank in India, has announced a marginal change in its lending rates with the reduction of the one-month MCLR rate by 25 basis points (bps).
The revision will take effect from October 15, 2024, and will be applicable until November 15, 2024.
While this reduction primarily affects short-term borrowing, the interest rates for all other tenures remain the same, offering stability for long-term loan seekers.
New MCLR Loan Interest Rates for October 2024:
SBI's revised MCLR rates for different tenures now range between 8.20% and 9.1%.
The most notable adjustment is for the one-month MCLR, which has dropped from 8.45% to 8.20%, reflecting a reduction of 25 bps. The following table highlights the latest MCLR rates:
- Overnight MCLR: 8.20%
- One-month MCLR: Reduced from 8.45% to 8.20%
- Six-month MCLR: 8.85%
- One-year MCLR: 8.95%
- Two-year MCLR: 9.05%
- Three-year MCLR: 9.1%
This revision is set to offer some relief to short-term borrowers, especially those looking to refinance or take out fresh loans during the festive period.
What is MCLR??
MCLR, or the Marginal Cost of Funds-based Lending Rate, is the minimum rate below which a bank cannot lend.
It is influenced by various factors, including the cost of deposits and the bank’s operating expenses.
The MCLR helps ensure that lending rates are more aligned with market conditions and provides borrowers with greater transparency in how their loan interest rates are calculated.
Other SBI Loan Rates:
While the one-month MCLR saw a reduction, other key lending rates, such as the base rate and the Benchmark Prime Lending Rate (BPLR), remain unchanged.
- SBI Base Rate: The base rate stands at 10.40%, effective from September 15, 2024.
- SBI BPLR: The Benchmark Prime Lending Rate (BPLR) is fixed at 15.15% per annum, also effective from September 15, 2024.
Home Loan Interest Rates (SBI EBLR):
For home loans, SBI's External Benchmark Lending Rate (EBLR), which is linked to the RBI's repo rate, stands at 9.15%.
The interest rate for home loans varies between 8.50% and 9.65%, depending on the borrower’s CIBIL score.
The repo rate, which currently stands at 6.50%, plays a significant role in determining this rate.
Borrowers can expect changes in their home loan interest rates in response to shifts in the repo rate.
According to SBI, if there is an upward revision in the repo rate, customers have the following options to manage their repayments:
1. Make a lump sum payment to maintain the existing EMI and loan tenure.
2. Extend the loan tenure within the permissible age and tenure limits.
3. Increase the EMI to repay the loan within the existing tenure.
4. Opt for a combination of these approaches to ease repayment pressure.
In conclusion, SBI's decision to reduce the one-month MCLR by 25 bps comes as a positive development for short-term borrowers during a time when interest rates have remained relatively stable.
This move offers flexibility for those looking for short-term financing solutions, while maintaining consistent rates for long-term loans.
Borrowers should carefully review their options, particularly for home loans, where changes in the repo rate can influence repayment strategies.
As always, it's advisable to keep abreast of changes in interest rates and explore various repayment options to ensure financial stability.
Disclaimer: The information provided is for educational and informational purposes only and should not be considered financial or investment advice. Please consult with a qualified financial advisor before making any loan or investment decisions.
