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Business News/ Money / Personal Finance/  Loan EMI is likely to increase as SBI hikes MCLR by up to 10 bps; check latest interest rates here
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Loan EMI is likely to increase as SBI hikes MCLR by up to 10 bps; check latest interest rates here

State Bank of India raises interest rates by 5 to 10 basis points on most loan tenures, effective from today.

SBI raises MCLR by up to 10 bps, potentially impacting loan EMI amounts. (REUTERS)Premium
SBI raises MCLR by up to 10 bps, potentially impacting loan EMI amounts. (REUTERS)

On Friday, December 15, the State Bank of India (SBI) announced an increase in the marginal cost of funds-based lending rate (MCLR) on select tenures by 5-10 basis points. This means that consumer loans, such as auto or home loans, will become more expensive for borrowers. 

The lender's choice to increase rates follows the December 8, 2023 decision by the monetary policy committee (MPC) led by RBI Governor Shaktikanta Das to maintain the repo rate at 6.5% for the fifth consecutive time.

Impact on borrowers

As a result of the increase in MCLR, equated monthly instalments (EMIs) on loans will become more expensive. Customers who are currently applying for a loan will have to accept the loan at the new, higher rate.

Additionally, customers who have already taken out a loan will have to pay their future instalments at this increased rate. However, it's important to note that MCLR-based loans have a reset period, after which the rates are revised for the borrower.

Overview of the revised MCLR of SBI

TenorExisting MCLR (%)Revised MCLR (%)
Overnight8.00%8.00%
One Month8.15%8.20%
Three Month8.15%8.20%
Six Month8.45%8.55%
One Year8.55%8.65%
Two Years8.65%8.75%
Three Years8.75%8.85%

(Source: SBI bank website) 

The new rates are 8.20% for a 1-month tenure, 8.20% for a 3-month tenure, 8.55% for a 6-month tenure, 8.65% for a 1-year tenure, 8.75% for a 2-year tenure, and 8.85% for a 3-year tenure, according to the SBI's website. 

These revised rates are now in effect starting today. This change also affects other tenures, with the exception of the overnight tenure, which remains unchanged at 8.00%.

 

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ABOUT THE AUTHOR
Deepika Chelani
A business media enthusiast. She covers the markets and personal finance beat for LiveMint.
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
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Published: 15 Dec 2023, 11:08 AM IST
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