SBI raises lending rates by 0.1 percent: Check how your EMIs are set to go up

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SBI raises lending rates by 0.1 percent




The State Bank of India, which is the largest lender in the country, has raised its marginal cost of funds-based lending rate by 10 basis points, or 0.1 percent, for all loan terms. This means that borrowers' monthly payments will go up.



This is the second straight hike in a month, raising the cost by 0.2 percent. The revision follows the Reserve Bank's off-cycle rate hike earlier this month. The central bank increased the repo rate, which it uses to lend short-term money to banks, by 0.40 percent to 4.40 percent.

SBI's (State Bank of India) lending rate revision is likely to be followed by other banks in the coming days.

EMIs will rise for borrowers whose loans are based on the MCLR (Marginal Cost of Funds-based Lending Rate), but not for those whose loans are based on other benchmarks.

Effective April 1, SBI's External Benchmark Based Lending Rate (EBLR) is 6.65 percent, while the Repo-Linked Lending Rate (RLLR) is 6.25 percent.

Banks charge a Credit Risk Premium (CRP) in addition to the EBLR and RLLR when making any kind of loan, including housing and auto loans.

According to the information on the SBI website, the increased MCLR rate goes into effect on May 15. With the change, the one-year MCLR has risen to 7.20 percent from 7.10 percent before.

The overnight, one-month, and three-month MCLRs all climbed by 10 basis points to 6.85 percent, while the six-month MCLR jumped to 7.15 percent.

The majority of loans are tied to the one-year MCLR rate. Simultaneously, the two-year MCLR climbed by 0.1 percent to 7.40 percent, while the three-year MCLR jumped to 7.50 percent.

Following the RBI's rate hike, numerous banks have already hiked interest rates, with more anticipated to follow in the coming days.

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