The State Bank of India (SBI) has increased its External Benchmark-based Lending Rate (EBLR) and Marginal Cost of Funds-based Landing Rate (MCLR) from December 15, onwards. While EBLR has been hiked by 35 basis points, MCLR has gone up by 0.25 percent. The hike by India’s biggest public sector lender implies increased EMIs on home loans, personal loans, and other consumer borrowings. However, the bank is offering concessions of 0.15 to 0.30 percent on loans as part of its festive offer.
The bank’s official website suggests that it has increased its External Benchmark-based Lending Rate (EBLR) to a minimum of 8.90 from the previous 8.55 percent. The lender will also add a risk premium depending on the CIBIL score of the borrower. The lower the CIBIL credit score, the higher the risk premium rate will be. In addition, SBI has hiked repo-linked lending rate (RLLR) by 35 basis points.
The MCLR, which is tied to most consumer loans, has been hiked by 0.25 percent across all tenures from Thursday onwards. This means that EMIs for term loans have increased.
The festive campaign from the bank, however, might ease things a little bit for some borrowers. Under this campaign, which has been running since October 4 and will last till January 31, 2023, the bank is offering a concession from 15 to 30 basis points in different home loan categories. Before the interest rate was hiked, the floor rate was 8.55 percent. After applying the festive offer of 0.15 percent concession, it came down to 8.40 percent.
With the hike from December 15 onwards, the floor rate has gone up to 8.90 percent. With the application of the offer, it would be down to 8.75 percent– a 35 basis points increase from the rate borrowers were previously paying.
Borrowers who already have a home loan and those who will opt for one from SBI will be entitled to concessions on their interest rates till January 31, 2023. However, how much of a concession a person is able to get will depend on their credit score since that affects the spread.
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