SBI increased lending rates beginning today. Loan EMIs will increase

  • July 15, 2022, 12:27 p.m.

The State Bank of India (SBI) has decided to increase its marginal cost of lending rate (MCLR) on loans by 10 basis points, or 0.10 per cent. The new lending rates will come into effect from today, July 15.

The bank has decided to increase the MCLR to 7.50 percent from the current 7.40 percent, as per the State Bank of India's website. The MCLR will be increased from 7.35 percent to 7.45 percent for the six-month tenor. 

The MCLR on the two-year tenor will be increased from 7.60 per cent to 7.70 per cent. On the three-year tenor, it will be increased from 7.7 per cent to 7.8 per cent. How the MCLR hike will impact retail borrowers 

It means that retail loans for homes, cars, or personal items could go up, which will also affect your Equated Monthly Installments (EMIs). 

SBI home loans, auto loans and interest rates 

SBI's home loan rates vary from 7.05% to 7.55% depending upon the CIBIL score. SBI auto loan interest rates vary from 7.45% to 8.15%. 

What is MCLR?

MCLR is the minimum lending rate below which banks are not allowed to lend. Every month, banks revise their MCLR rates depending on market conditions. MCLR is different for various tenors, ranging from overnight to three years. It is derived based on the components such as the marginal cost of funds, operating costs, cash reserve ratio (CRR), and tenure premium. 

Other banks also hiked MCLR rates in July. The Bank of Baroda hiked the benchmark Marginal Cost of Funds based on the Lending Rate (MCLR) by 10-15 basis points on certain tenures. The new rates are effective from July 12.

Private lender, IDFC First Bank, also hiked benchmark lending rates by 10 to 15 basis points on various tenures. The new rates of Marginal Cost of Funds based Lending Rate (MCLR) have come into effect from July 8, 2022.

Author : Rajdhani Delhi Representative

Rajdhani delhi representative

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