Home loans get cheaper as SBI cuts lending rates

The lending rate reduction comes after Reserve Bank of India (RBI) cut the repo rate by 40 bps in May.

June 08, 2020 09:00 pm | Updated 09:40 pm IST - Mumbai

Representational image only.

Representational image only.

Country’s largest lender State Bank of India (SBI) has reduced the marginal cost of fund based lending rate (MCLR) by 25 bps across all tenors.

The one year MCLR will fall to 7% from 7.25% with effect from June 10, 2020. “This is the thirteenth consecutive reduction in bank’s MCLR ,” the SBI said.

The lending rate reduction comes after Reserve Bank of India (RBI) cut the repo rate by 40 bps in May . SBI has reduced its deposit rate twice in May which also helped to reduce the lending rate.

Following the repo rate cut, the lending rates of SBI which are linked to the repo rate, are reduced by 40 bps.

The external benchmark linked lending rate (EBR) will now become 6.65% from July 1, as compared to 7.05% now.

Time after time: The Hindu Editorial on RBI repo rate cut

The Repo Linked Lending rate (RLLR) was reduced to 6.25% from 6.65% from June 1 .

“Consequently, EMIs on eligible home loan accounts linked to MCLR will get cheaper by approximately ₹421 and those linked to EBR/RLLR will get cheaper by around ₹660, for a 30-year loan of ₹25 lakh,” SBI said.

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