Good news for SBI home loan borrowers: EMIs to fall as the bank reduces the lending rates

The State Bank of India (SBI) has announced a reduction in its External Benchmark-based Lending Rate (EBLR)and Repo Linked Lending Rate (RLLR) applicable on various loans. This has come after the Reserve Bank of India's (RBI) decided to cut the repo rate by 25 basis points (bps) from 6.50% to 6.25% in its MPC meeting last week. The revised lending rates will be effective from February 15, 2025.

However, the bank has kept the marginal cost-based lending rates(MCLR), Base rate, and Benchmark Prime Lending Rate (BPLR) unchanged from previous rates.

Also read: Lower EMI for home loan borrowers of Canara Bank, PNB, Union Bank and others as these banks cut repo linked lending rates

What is EBLR?

EBLR stands for External Benchmark Lending Rate. SBI has adopted Repo Rate as the external benchmark to link its floating rate home loans with effect from 01.10.2019. All floating rate home loans will have interest rates linked to External Benchmark.

External Benchmark Lending Rate (EBLR) Reduction
Previous EBLR: 9.15% + CRP + BSP
Revised EBLR: 8.90% + CRP + BSP

The EBLR has been reduced by 0.25% (25 basis points). This means that borrowers with loans linked to EBLR (such as home loans, personal loans, and other retail loans) may benefit from a lower interest rate, resulting in lower EMIs or a reduced repayment period.

Big relief for home loan borrowers as EMIs to fall by 1.8% on a 20 year loan tenure as RBI reduced repo rate by 25 bps

Repo Linked Lending Rate (RLLR) Reduction

Previous RLLR: 8.75% + CRP
Revised RLLR: 8.50% + CRP
The RLLR has been cut by 0.25% (25 basis points). Since RLLR is directly linked to the RBI’s repo rate, a decrease in this rate means lower borrowing costs for customers with loans tied to RLLR, such as home loans and business loans.


These changes mean that borrowers with loans linked to EBLR or RLLR may see an decrease in their EMIs (Equated Monthly Installments) or loan tenure, depending on their loan terms. With the repo rate cut, SBI has passed on the benefits to borrowers by reducing EBLR and RLLR, making home loans more attractive. However, customers with MCLR-linked loans may need to switch to benefit from lower interest rates.

Impact on borrowers
Floating-rate loans linked to EBLR or RLLR will see an decrease in interest rates, leading to lower EMIs or fewer repayment tenures.
New borrowers should compare lending rates across different banks before choosing a loan, as interest rate revisions directly impact affordability.

With lending rates witnessing a downtrend after the RBI repo rate cut, borrowers must review their loan agreements and consider refinancing options if needed. Keeping track of repo rate movements and external benchmarks will help in making informed financial decisions.

Other banks that have reduced lending rates
Following the central bank, many banks such as Canara Bank, PNB, Union Bank of India and Bank of Baroda also cut their repo linked lending rate by 0.25%. Home loan borrowers of these banks will have a choice of either reducing their EMIs while keeping the tenure unchanged or reducing their remaining tenure while keeping the EMI amount unchanged.