The State Bank of India (SBI) has decided to increase its marginal cost of lending rate (MCLR) on loans by 10 basis points or 0.10 per cent. The new lending rates will come into effect from today, July 15.
For one year tenor, the bank has decided to increase MCLR to 7.50 per cent from the current 7.40 per cent, as per State Bank of India’s website.
For the six-month tenor, the MCLR will be increased from 7.35 per cent to 7.45 per cent.
The MCLR on two years tenor will be increased from 7.60 per cent to 7.70 per cent. On three years tenor, it will be increased from 7.7 per cent to 7.8 per cent.
How MCLR hike will impact retail borrowers
It means that retail loans for homes, cars, or personal could go higher, and will also affect your Equated Monthly Installments (EMIs).
SBI home loans, auto loans interest rates
SBI’s home loan rates vary from 7.05% to 7.55% depending upon the CIBIL score. SBI auto loans vary from 7.45% to 8.15% interest rate.
What is MCLR?
MCLR is the minimum lending rate below which banks are not allowed to lend. Every month, banks revise their MCLR rate depending on the market conditions. MCLR is different for various tenors ranging from overnight to three years. It is derived based on the components such as the marginal cost of funds, operating costs, Cash Reserve Ratio (CRR), and Tenure Premium.
Other banks too hiked MCLR rates in July
Bank of Baroda hiked the benchmark Marginal Cost of funds based on the Lending Rate (MCLR) by 10-15 basis points on certain tenures. The new rates are effective from July 12.
Private lender, IDFC First Bank also hiked benchmark lending rate by 10 to 15 basis points on various tenures. The new rates of Marginal Cost of Funds based Lending Rate (MCLR) have come into effect from July 8, 2022.
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