The SBI is increasing its lending rates effective today. Loan EMIs will increase

For a term of one year, the bank has decided to increase the MCLR to 7.50% from the current 7.40%, according to the State Bank of India website.

For the six-month term, the MCLR will drop from 7.35% to 7.45%.

The MCLR over a two-year term will increase from 7.60% to 7.70%. Lasting three years, it will drop from 7.7% to 7.8%.

How the Rising MCLR Will Affect Retail Borrowers

This means that personal loans for homes, cars or individuals could increase and will also affect your monthly equivalent payments (EMI).

SBI home loans, car loan interest rates

SBI home loan rates range from 7.05% to 7.55% depending on the CIBIL score. SBI auto loans range from 7.45% to 8.15% interest rate.

What is MCLR?

The MCLR is the minimum lending rate below which banks are not allowed to lend. Every month, banks revise their MCLR rate according to market conditions. The MCLR is different for different durations ranging from overnight to three years. It is derived based on components such as marginal cost of funds, operating costs, cash reserve ratio (CRR), and occupancy premium.

Other banks also raised MCLR rates in July

Bank of Baroda raised the marginal cost of benchmark funds based on the lending rate (MCLR) by 10 to 15 basis points on certain mandates. The new rates come into effect on July 12.

Private lender IDFC First Bank also raised the benchmark lending rate by 10 to 15 basis points on various mandates. The new rates for the lending rate based on the marginal cost of funds (MCLR) came into effect on July 8, 2022.

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