Good news for SBI home loan borrowers |Interest rate come down to 8.3%|

India's largest public lender bank,State Bank of India(SBI) had given a belated Diwali gift to its home loan borrowers as the rate of interest lowered by 0.05% to 8.3% which is lowest in the industry.The bank also reduced its MCLR(Marginal cost of funds based lending rate) by 5 points.This is the first time the bank has cut its lending rate rate in 10 months.
SBI Bank branch front
Saurabh Shetty [CC BY 3.0], via Wikimedia Commons

SBI said in a statement-
With this reduction, SBI's offering in home loan is the lowest in the market. The new rates will be effective November 1  

The effective interest rate will for all eligible salaried customer will be 8.30 for loans up-to Rs 30 lakh.
For a car loan customer, interest ranges from 8.70% to 9.20 % compared to the earlier 8.75-9.25 %. The exact rate depends on the amount of loan and the credit score of the individual.

Why the fall of MCLR benefits new customer more?
The benefit of falling MCLR(Marginal cost of funds based lending rate) is not that fast as the customers are thinking.As for most of the MCLR-linked home loan contracts the banks to reset the interest rate after 12 months.
So if  you are in the market and struggling to get home loan,make it quick.SBI cutting rates usually is signal that other lenders will follow the same and will lower their interest rate to attract customers.

What should existing borrowers do?
Do not expect that the EMIs(Equated monthly installments) will fall immediately after the RBI cuts repo rate.Try to finish your home loan as soon as possible. 
Good news for SBI home loan borrowers |Interest rate come down to 8.3%| Good news for SBI home loan borrowers |Interest rate come down to 8.3%| Reviewed by Saurabh Jadhav on November 03, 2017 Rating: 5
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