SBI home loan EMI will increase: Home Loan Borrowers of India’s Largest Public Sector Bank state Bank of India, or SBI, are set to feel a pinch in their pockets as the lender has announced new rates under which their home loan EMIs will be increased from tomorrow. that’s because SBI has increased its external benchmark lending rate (EBLR) on home loans rose 40 basis points to 7.05 per cent. The lender has also announced that the repo-linked lending rate (RLLR) will in turn be revised to 6.65 per cent higher than the CRP. According to the official website of State Bank of India, the new rates will be applicable from Wednesday, June 1.
latest decision of SBI to hike EBLR rates The Reserve Bank has come after weeks India Earlier this month, an off-cycle monetary policy committee meeting decided to increase the repo rates by 40 basis points. This was done to control the rising inflation in the country. RBI may again increase its key interest rates in the next meeting of the MPC to be held from June 6 to June 8.
Latest SBI home loan rate hike, effective from June 01
The EBR (effective from June 1) is 7.05 per cent; EBLR = 7.05 percent + CRP
RLLR (effective from June 1) will be 6.65 per cent + CRP.
Earlier, SBI’s EBLR rate was 6.65 percent, while RLLR was 6.25 percent.
According to SBI, “External Benchmark Based Lending Rate (EBLR) = External Benchmark Rate (EBR) + Credit Risk Premium (CRP)”. It is a practice for banks to add Credit Risk Premium (CRP) on EBLR and RLLR while providing any loan to borrowers including home loans and car loans.
What is External Benchmark Lending Rate or EBLR?
As per the SBI website, “EBLR stands for External Benchmark Lending Rate. SBI has adopted the repo rate as the external benchmark for linking its floating rate home loans with effect from 01.10.2019. The EBLR rate fluctuates with the Reserve Bank’s benchmark interest rate, and remains unchanged outside it.
EBLR is a new interest rate model, under which floating rate home loan interest rates will be linked to an external benchmark. On the other hand, Repo Linked Loan Rate (RLLR) is based on and related to the repo rate of RBI, which is adjusted on a regular basis. The RLLR is adjusted after the repo rate rises or falls. It varies from bank to bank.
Is EBLR a new home loan product? What are the charges for migrating to this infrastructure?
As per the SBI website, EBLR is not a new home loan product. “This is a new interest rate structure. All floating rate home loan interest rates will be linked to an external benchmark,” the website says. In addition, SBI charges a one-time switch over fee of Rs 1000 plus tax for migrating to the new home loan structure.
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