State Bank of India (SBI) has just surfaced as the knight in shining armor dishing out the favor of reducing home loan interest rates, which came as a knight in shining armor blessing to its borrowers. The bank has now touched the ceiling low of the External Benchmark Based Lending Rate (EBLR) and Repo Linked Lending Rate (RLLR); thus, they have yielded a decrease in interest rates starting from February 15th.
Why the Rate Cut?
The rate cut is in tandem with the decision of the Reserve Bank of India (RBI) to downsize the repo rate by 25 basis points, from 6.50% to 6.25%. Nevertheless, MCLR and BPLR rates are yet fixed.
New Interest Rates
- EBLR has come down 25 basis points lower, now at 8.90% from 9.15%.
- RLLR, which is an entity that is directly linked to RBI's repo rate, has also been trimmed by 25 basis points to land it at 8.50%.
These rate cuts will result in the cost of home, personal and business loans linked to these benchmarks also becoming low. This way, the borrowers get the options to either lower their EMI payments or else reduce the repayment period that they can go for.
Other Banks Following Suit
Under the new conditions that RBI brought by lowering repo rate, several public sector banks have expressed their intentions to join them in this move. They include Canara Bank, Punjab National Bank, Union Bank of India, and Bank of Baroda, who have all reduced their repo-based lending rates by 0.25 percentage points as well.
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