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State Bank of India (SBI) has given a big shock to the customers. The bank has increased its marginal cost of fund-based loan rates (MCLR) by 10 basis points i.e. 0.10 percent on select periods. This will make loans including auto and personal loans expensive. Also, people will now have to pay more EMI. The new rates have come into effect from July 15, 2024 i.e. Monday.

SBI has increased the MCLR rates by 0.10 percent for six month, one year and two year tenures, making them 8.75%, 8.85% and 8.95% respectively. At the same time, the MCLR for three years has been increased by 5 basis points to 9%. Earlier in June, the bank had increased the loan rate (MCLR) by 10 bps on selected tenures.

What is MCLR?

MCLR is called Marginal Cost of Funds Based Lending Rate. This is the minimum lending rate below which banks cannot lend to anyone. MCLR has a direct impact on the EMI of your personal and auto loan. With the increase in MCLR, the new loan becomes expensive. Along with this, the EMI of your existing loan also increases.

There is no change in SBI EBLR

There is no change in SBI External Benchmark Lending Rates (EBLR). It has been kept at 9.15%. All home loans are linked to external benchmark lending rates and SBI home loan interest rates range between 8.50% to 9.65%. It varies based on CIBIL score.

There was no change in the repo rate

The Reserve Bank of India has kept the repo rate unchanged at 6.5 percent since February 2023. This is the eighth time the central bank has kept it stable. This decision was taken in the meeting of the RBI Monetary Policy Committee (MPC).