SBI Raised Interest Rates, Now Your EMI Will Be Affected Like This

SBI is the largest bank in the country.

The country’s largest government-owned bank, State Bank of India (SBI), has increased the MCLR rates. MCLR has been increased from 8.85% to 8.95%. The new rates came into effect from August 15, 2024. Due to the increase in MCLR, it will now become expensive to take a loan from the bank. Not only this, you will now have to pay more EMIs for home loans, car loans, and education loans. This will have a direct impact on the pockets of the customers.

understand math here

Suppose you are going to take a loan of Rs 10,000,000, the tenure of which is 10 years i.e. 120 months and the spread is 1%. We will calculate EMI in two situations. First MCLR at 8.85% and second MCLR at 8.95%. Then we will see what effect is seen.

MCLR 8.85% (interest rate 9.85%)

• Spread 1% (Loan spread is the additional interest rate added to the MCLR rate)
• Total interest rate: 8.85% + 1% = 9.85%
• Monthly interest rate: 9.85% / 12 = 0.008208
• On calculating EMI on this, an EMI of Rs 13,227 will have to be paid at MCLR 8.85%.

Interest rate at MCLR 8.95

• MCLR- 8.95%
• Spread- 1%
• Total interest rate: 8.95% + 1% = 9.95%
• Monthly interest rate 9.95% / 12 = 0.008292
• On calculating EMI on this, an EMI of Rs 13,318 will have to be paid at MCLR 8.85%.

If MCLR increases from 8.85% to 8.95%, there will be a difference of approximately Rs 91 in your EMI. So, a 0.10% increase affects your EMI on MCLR and you will have to pay more every month.

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These banks have also raised interest rates.

Prior to the MCLR hike by SBI, many banks made changes to their MCLR and their new rates also came into effect from this month. If we talk about the banks included in this list, it includes Bank of Baroda, Canara Bank, and UCO Bank.