SBI cuts lending rate, home, auto loan EMIs to fall

The country's largest lender State Bank of India (SBI) has cut its marginal cost of fund-based lending rate (MCLR) by up to 15 basis points across various tenors effective March 10, a move which will make home loans cheaper. SBI has reduced its one-year MCLR by 10 basis points to 7.75% from 7.85% earlier. This is 10th consecutive cut in MCLR by the bank in the current fiscal. The lender had on February 10th had cut MCLR rates by 5 basis points across all tenors.

"After the rate cut, EMIs on eligible home loan accounts (linked to MCLR) will get cheaper by around Rs. 7.00 per 1 lakh on a 30-year loan. EMIs on car loans will also be reduced by Rs. 5.00 per 1 lakh on a 7-year loan," SBI said.

MCLR rates are based on the bank's own cost of funds. If your home loan is linked to SBI's MCLR rate, the latest cut may not bring down your EMIs immediately as MCLR-based loans typically have a one-year reset clause.

As part of today's revision, SBI's overnight and one-month MCLRs have been reduced by 15 basis points to 7.45% each. Three-month MCLR has been revised to 7.50% from 7.65%.

The new two-year and three-year MCLRs stand reduced by 10 basis points to 7.95% and 8.05% respectively.

SBI has also cut interest rates on fixed deposits or FDs for second time in a month. The revised rates came into effect from 10th March. SBI had earlier cut interest rates on FDs on 10th February. (Check latest SBI FD rates)

On Monday, another state-run lender Union Bank of India had announced cut in its MCLR by 10 basis points across all tenors, effective March 11.

The bank has cut its one-year MCLR to 8% from 8.10%. The overnight MCLR has been revised to 7.55%, while the new one month rate stands at 7.60%, the bank had said. (With Agency Inputs)