New EMI Alert: SBI Cuts Lending Rates After RBI Repo Rate Shift

When you take a home loan, you usually focus on the interest rate you will pay. But behind that figure is a powerful lever called the Repo Rate, which is set by the Reserve Bank of India (RBI).

The repo rate is the rate at which the RBI lends money to commercial banks like SBI. When this rate goes down, borrowing becomes cheaper for banks—and ideally, they pass on this benefit to customers through lower loan interest rates.

But there’s a difference between the repo rate and the loan interest rate you are charged. Refer to this table to understand the difference:

In line with the 50 basis points (bps) repo rate cut announced by the RBI on June 6, 2025, the State Bank of India (SBI) has responded by reducing its lending rates. This move aims to ease the repayment burden for existing borrowers and offer cheaper credit to new ones.

MCLR vs EBLR: What’s the Difference?

When it comes to loan interest rates, you may have heard terms like MCLR and EBLR. These are simply different ways banks calculate the interest on your loan.

In short, EBLR moves faster with RBI’s rate cuts or hikes, while MCLR adjusts more slowly.

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SBI Cuts Down MCLR and EBLR for Home Loans

Following the repo rate cut, SBI has reduced both its MCLR and EBLR-linked home loan interest rates. Here’s what the changes look like:

• 1-year MCLR reduced from 9.40% to 9.10%
  
  
• EBLR slashed from 8.65% to 8.15%

Let’s understand the impact through an example.

Suppose Ravi took a home loan of ₹50 lakh for 20 years at an interest rate of 12% (prior to the rate cut).

Here’s how Ravi’s monthly EMI and total interest would change with the new reduced rates:

₹42,181

₹51.23 lakh

₹30.83 lakh

So, if you were in Ravi’s place, would you pay an extra ₹30 lakh to your private bank? If not, then consider refinancing your loan with SBI bank.

2 Options After Interest Rate Reduction

Now that interest rates are lower, Ravi—and borrowers like him—have two clear choices:

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1. Reduce EMIs
   
   
2. Reduce Loan Tenure