SBI hikes lending rates by 50 bps, check impact on home loans, interests
Premium- With the new rate revision, the SBI’s EBLR stands at 8.55% and RLLR stands at 8.15%, and both the rates are effective from 1 October 2022.
Following the Reserve Bank of India's (RBI) decision to raise the repo rate by 50 basis points in its Monetary Policy Committee, public sector lender State Bank of India (SBI) too hiked its external benchmark lending rate (EBLR) and repo linked lending rate (RLLR) by 50 bps.
With the new rate revision, the SBI’s EBLR stands at 8.55% and RLLR stands at 8.15%, and both the rates are effective from 1 October 2022.
So customer looking at the impacts of the new hike, i.e. 50 bps (100 basis points = 1%), the interest on home loan EMIs will increase too.
Considering a customer taken a home loan of ₹35 lakh for a tenure of 20 years. In case the old interest rate charged on his or her home loan was 8/05 per cent, now it will be charged 8.55 percent, post the hike.
Looking in detail, here's how it will show:
| Content | Variables |
| Principal amount | ₹35 Lakh |
| Tenure of Home Loan | 20 years |
| Old Interest Rate | 8.05% |
| Old EMI | ₹29,384 |
| New Interest Rate | 8.55% |
| New EMI | ₹30,485 |
| Hike in Home Loan EMI | ₹1,101 |
What was shown in the above table was for example and the actual hike in EMI will depend on the outstanding loan amount, the interest rate charged by the bank and the tenure of the loan.
However, the PSB will calculate the in interest rate charged on the home loan considering various factors including CIBIL score, borrower's profile, loan to value ration, risk assessment, payment failure, etc.
There is another case when the higher EMI outgo can decrease only when the borrower opts to hike the tenure of the loan. However, this option will increase higher interest on the loan taken.
Or, if the loan amount is prepaid, in case the borrower prepays a certain part of the loan amount, this will bring down the outstanding loan amount and hence a revised but decreased interest rate will apply.
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