EMIs to go up ! SBI hikes loan interest rates across all tenures

SBI hikes loan interest rates : State Bank of India (SBI), the largest lender in the country, increased the Marginal Cost of Funds-Based Lending Rate (MCLR) by 10 basis points across all loan tenures. 

This adjustment, effective from June 15, 2024, is expected to impact borrowers with loans linked to the MCLR, resulting in higher Equated Monthly Instalments (EMIs), affecting consumer loans such as auto and home loans.

Effective from June 15, 2024, SBI's MCLR for the 1-year tenure has been revised upward to 8.75% from the previous 8.65%, as per information available on the bank's website. 

Notably, SBI's auto loans are linked to the one-year MCLR, while personal loans are linked to the two-year MCLR.

Borrowers with loans linked to MCLR should anticipate an increase in their Equated Monthly Instalments (EMIs) due to the rate hike.

New SBI MCLR Rates

State Bank of India (SBI) has adjusted its Marginal Cost of Funds-Based Lending Rate (MCLR) across various tenures. 

The overnight MCLR has been increased from 8% to 8.1%, while the rates for one-month and three-month tenures have been raised from 8.2% to 8.3%. Similarly, the six-month MCLR now stands at 8.5%, up from 8.4%. 

Will your EMIs go up? 

Most retail loans, such as home and auto loans, are linked to the Marginal Cost of Funds-Based Lending Rate (MCLR). As SBI has adjusted its MCLR rates recently, borrowers with loans tied to MCLR will likely face an increase in their Equated Monthly Instalments (EMIs).

The impact of these rate changes will be felt based on borrowers' loan reset periods. After each reset period, typically every one year for one-year MCLR-linked loans and every six months for six-month MCLR-linked loans, the revised MCLR rates will apply to their outstanding loan balances.

- With inputs from agencies

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