India’s largest public sector bank, State Bank of India (SBI), has announced a reduction in its External Benchmark-based Lending Rate (EBLR) and Repo Linked Lending Rate (RLLR).
This move comes after the Reserve Bank of India (RBI) reduced the repo rate by 25 basis points (bps), from 6.50% to 6.25%, during its recent Monetary Policy Committee (MPC) meeting.
The new home loan rates and other lending rates will be effective from February 15, 2025.
This decision is expected to lower EMIs for home loan borrowers and encourage more people to opt for affordable home financing. Let’s take a closer look at how this rate cut impacts borrowers and the overall loan market.
SBI Home Loan Rate Cut: Key Highlights
✅ EBLR and RLLR reduced following RBI’s repo rate cut.
✅ New lending rates effective from February 15, 2025.
✅ Lower interest rates on home loans, personal loans, and business loans.
✅ Expected reduction in EMIs for existing and new borrowers.
✅ Boost to the real estate sector and affordable housing market.
What is EBLR and RLLR? How Do They Affect Loan Rates?
Before understanding the impact of SBI’s latest rate cut, it is important to know what EBLR and RLLR mean:
🔹 External Benchmark-based Lending Rate (EBLR)
The EBLR is directly linked to external benchmarks like the RBI repo rate. Any change in the repo rate affects EBLR-linked loans, such as home loans, auto loans, and personal loans.
🔹 Repo Linked Lending Rate (RLLR)
RLLR is also linked to the RBI repo rate and fluctuates whenever the RBI revises the repo rate. A lower RLLR means reduced interest rates on loans, leading to lower EMIs for borrowers.
Since both EBLR and RLLR are connected to the repo rate, SBI’s decision to lower these rates after the RBI’s 25 bps repo rate cut will bring relief to home loan borrowers.
SBI’s New Home Loan Interest Rates After Rate Cut
After this revision, SBI’s home loan rates will be among the most competitive in the market. Here’s how the new interest rates look:
| Loan Type | Old Interest Rate | New Interest Rate (Effective from Feb 15, 2025) |
|---|---|---|
| EBLR | 9.15% | 8.90% |
| RLLR | 8.75% | 8.50% |
| Home Loan | Starting at 8.50% | Starting at 8.25% |
| Personal Loan | 10.50% | 10.25% |
| Auto Loan | 9.25% | 9.00% |
📌 Impact on Home Loan Borrowers
The reduction in EBLR and RLLR will significantly benefit both new and existing home loan borrowers:
- Lower EMIs: Borrowers will pay less interest, reducing their overall EMI burden.
- Higher Loan Eligibility: Lower rates make it easier for applicants to qualify for higher loan amounts.
- Encouraging Home Buyers: The real estate sector is expected to witness growth as lower rates attract more homebuyers.
How Much EMI Will Reduce After the Rate Cut?
If you have a home loan of ₹50 lakh for a tenure of 20 years, here’s how your EMI will change:
| Interest Rate Before Cut | EMI Before Cut | Interest Rate After Cut | New EMI | EMI Savings Per Month |
|---|---|---|---|---|
| 8.50% | ₹43,391 | 8.25% | ₹42,737 | ₹654 |
| 9.00% | ₹44,986 | 8.75% | ₹44,212 | ₹774 |
Key Takeaways:
- The EMI on a ₹50 lakh home loan can be reduced by up to ₹774 per month.
- Over a 20-year loan tenure, this means a total savings of ₹1,85,760!
This reduction in EMI will help borrowers manage their finances better while also encouraging new home loan applicants.
Why Did SBI Reduce Home Loan Rates?
SBI’s decision to slash home loan interest rates is a direct result of the RBI’s repo rate cut. The 25 bps cut in the repo rate was aimed at:
📉 Reducing borrowing costs for individuals and businesses.
🏡 Boosting home loan affordability and supporting the real estate sector.
💰 Encouraging economic growth by increasing consumer spending.
🏗️ Promoting affordable housing and infrastructure development.
Since SBI is India’s largest public sector lender, this move will likely push other banks to follow suit, leading to a more competitive home loan market.
Should You Apply for a Home Loan Now?
If you are planning to buy a new home or transfer your existing home loan, now is an excellent time to do so. Here’s why:
✔️ Lower Interest Rates: SBI’s rate cut means lower EMIs and reduced borrowing costs.
✔️ Increased Loan Eligibility: Lower interest rates mean better eligibility for higher loan amounts.
✔️ Best Time for Homebuyers: Developers are offering discounts and flexible payment options, making it a great time to invest.
Tip: If you already have a home loan, consider a home loan balance transfer to SBI for lower interest rates and reduced EMI burden.
How to Apply for an SBI Home Loan?
Applying for an SBI home loan is easy and can be done online in a few simple steps:
📌 Step 1: Visit SBI’s official website or nearest branch.
📌 Step 2: Check your loan eligibility using the home loan calculator.
📌 Step 3: Submit necessary documents (KYC, income proof, property details).
📌 Step 4: Get loan approval and verification done.
📌 Step 5: Loan amount is disbursed to your account.
Conclusion: SBI’s Home Loan Rate Cut is a Big Relief for Borrowers
With SBI slashing its home loan rates after the RBI repo rate cut, borrowers can now enjoy lower EMIs and reduced interest payments. This move will not only help existing home loan customers but also encourage new borrowers to invest in homes.
Key Benefits:
✅ Lower EMIs on home loans.
✅ Affordable housing becomes more accessible.
✅ Higher loan eligibility for borrowers.
✅ Boost to the real estate and housing sector.
If you’re planning to buy a home or refinance your existing home loan, now is the perfect time to apply and take advantage of these lower rates!
