National: SBI Slashes Rates on Loan EMIs
State Bank of India (SBI) announced a significant reduction in its Marginal Cost of Funds-Based Lending Rate (MCLR) by up to 25 basis points, effective July 15, 2025, offering relief to home loan borrowers. This move, aligned with the Reserve Bank of India’s repo rate cut, lowers equated monthly installments (EMIs) for loans. For a ₹25 lakh home loan over 10 years, the revised rates promise substantial savings.
Rate Cut Details
SBI’s MCLR now ranges from 7.95% to 8.90%, down from 8.20% to 9.10%, impacting various loan tenures. The one-year MCLR, relevant for most home loans, dropped from 9.00% to 8.80%. This adjustment reflects SBI’s response to RBI’s 25-basis-point repo rate reduction to 6.25%.
Impact on Home Loan EMIs
For a ₹25 lakh home loan at 8.20% interest over 10 years, the EMI is approximately ₹30,597, with total interest of ₹11.71 lakh, resulting in a total repayment of ₹36.71 lakh. With a superior CIBIL score securing a 7.80% rate, the EMI reduces to ₹30,068, with total interest at ₹11.08 lakh. These figures exclude processing fees.
Processing Fees and Eligibility
SBI charges a processing fee of 0.35% of the loan amount plus GST, ranging from ₹2,000 to ₹10,000. Eligibility depends on factors like CIBIL score, income, and employment profile, with better scores yielding lower rates. Borrowers with strong credit profiles benefit most from the rate cut.
Flexible Loan Schemes
SBI offers tailored home loan schemes, including Flexipay, Privilege, and Shaurya, with rates starting at 7.50% for specific categories like women and defense personnel. The bank supports up to 90% of property value for loans up to ₹30 lakh, subject to creditworthiness. These schemes enhance affordability for diverse applicants.
Broader Implications
The rate reduction aligns with RBI’s monetary policy easing, potentially stimulating housing demand. Borrowers can opt for lower EMIs or shorter tenures, enhancing financial flexibility. SBI’s move sets a benchmark for other lenders, fostering competitive home loan offerings.
Calculating Your Savings
Using SBI’s EMI calculator, borrowers can estimate savings by inputting loan amount, tenure, and interest rate. For precise planning, applicants should verify rates with SBI, as final rates vary based on credit profiles and loan schemes. The rate cut offers a strategic opportunity for prospective homeowners.