The 6-month SBI home loan will be applicable only for new loans. Since October 1, 2019, all lendings by banks are based on external benchmarks for which most banks have chosen the repo rate. So, new loans are mostly RLLR – Repo Linked Lending Rate. One is allowed to switch from MCLR to the RLLR mechanism with the same bank or any other bank.
India’s biggest bank State Bank of India or SBI has adopted 6-month MCLR reset frequency for retail loans as compared to earlier frequency of one year. “Enjoy the benefits of a reduction in the interest rate without waiting for a year. SBI has reduced the MCLR reset frequency from 1 year to 6 months,” SBI tweeted.
Currently, the one-year of MCLR of SBI, against which home loans are typically benchmarked, stands at 7% while six-month at 6.95%. In July, SBI has announced a cut in its short-term MCLR rates to boost credit off take and revive demand.
The Bank has the largest network of over 22,000 branches in India with an ATM / CDM network of over 58,000.
