SBI hikes lending rates by 50 bps, check impact on home loans, interest

With the new rate revision, SBI’s EBLR is 8.55% and RLLR is 8.15%, and both the rates are effective from 1 October 2022.

So customer looking at the effects of the new hike, i.e. 50 bps (100 basis points = 1%), the interest on home loan EMI will also increase.

Read also: RBI hikes repo rate to control inflation

A customer considering taking a home loan 35 lakhs for a tenure of 20 years. If the old interest rate on his home loan was 8/05 per cent, now it will be charged 8.55 per cent after the increase.

In detail, it would look like this:

What was shown in the above table was illustrative and the actual increase in EMI would depend on the outstanding loan amount, the interest rate charged by the bank and the tenure of the loan.

However, PSBs will calculate the interest rate charged on the home loan considering various factors including CIBIL score, profile of the borrower, loan to value ration, risk assessment, payment failure etc.

There is another case when the higher EMI outgo can be reduced only if the borrower chooses to extend the tenure of the loan. However, the loan taken with this option will fetch higher interest.

Or, if the loan amount is prepaid, if the borrower pays a certain portion of the loan amount, this will reduce the outstanding loan amount and hence a revised but reduced interest rate will apply.