SBI loan interest rate plunges to 10-year low! Good news starts from 1st January 2020 for homebuyers

SBI Loan Interest Rate: In what will come as welcome news for loan takers, the State Bank of India (SBI) has reduced its home loan interest rate by as much as a quarter per cent, means 0.25 per cent from 8.15 per cent to 7.9 per cent. SBI announced the decision on 30th December 2019 saying the new SBI home loan rates will be effective from 1st January 2020. The decision will bring new year cheer for homebuyers as from 1st October 2019, SBI and some other banks have linked their home loan and other retail loans with the RBI's Repo Rate through linking of the External Benchmarking of its interest rates.

With this reduction, the SBI interest rate for existing home loan customers as well as MSME borrowers who have availed loans linked to External Benchmark Based Rate would come down by 25 bps or 0.25 per cent. Now, from 1st January 2020, the new homebuyers will get loans at an interest rate starting from 7.90 per cent per annum which is currently at 8.15 per cent per annum. SBI Flexible Home Loans full list is now available on the official website sbi.co.in.

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While announcing about the decision, the SBI officials informed that the decision has been taken to push the lending business of the bank and contain sluggishness prevailing into the real estate sector. They said that when the reduction in corporate tax was taken, a reduction in retail loans was awaited and this decision has to be seen as the next step post-corporate tax reduction. They said that when the corporate loans are not picking, reduction in the home loan may work as a catalyst in the loan segment of the banking sector.

After SBI home loan interest rate hitting its decade low, other Indian commercial banks are also expected to follow suit as SBI dominates home loan and auto loan segment in the Indian market. The largest Indian commercial bank has a 25 per cent share in the home loan business while in the auto loan business, it dominates with the same percentage point in the Indian banking sector.

From 1st January  2020, SBI home loan interest rate for up to Rs 30 lakh is currently at 8.15 per cent which has now been reduced to 7.9 per cent. For SBI home loan from Rs 30 lakh to Rs 75 lakh, the interest rate will now be 8.20 per cent which is currently at 8.45 per cent. For SBI Home Loan above Rs 75 lakh, the interest rate effective from 1st January 2020 will be 8.30 per cent which is currently at 8.55 per cent.