The overnight and one-month Marginal Cost of Funds based Lending Rate (MCLR) is established at 8.20%.
The State Bank of India (SBI) has announced its latest marginal cost of funds-based lending rates (MCLR) for loans between January 15 and February 15, 2025. These rates, which will take effect on January 15, 2024, will influence the interest rates for home loans, personal loans, and auto loans.
The bank has maintained consistent rates across all tenures.
The overnight and one-month Marginal Cost of Funds based Lending Rate (MCLR) is established at 8.20%. The three-month MCLR is positioned at 8.55%, while the six-month MCLR is set at 8.90%. The one-year MCLR, which is frequently associated with auto loans, is fixed at 9%.
The MCLRs for two and three years are set at 9.05% and 9.10%, respectively.
| Tenure | Revised MCLR (In %) |
| Over night | 8.2% |
| One Month | 8.20% |
| Three Month | 8.55% |
| Six Month | 8.90% |
| One Year | 9% |
| Two Years | 9.05% |
| Three Years | 9.10% |
Source: SBI website
The MCLR system, set by the Reserve Bank of India in 2016, is designed to improve transparency in lending rates and to more accurately represent the cost of funds for banks. This framework enables banks to adjust their lending rates more frequently in response to fluctuations in market conditions.
MCLR acts as the reference point for various loan categories, such as home loans, auto loans, and personal loans.
Borrowers whose loans are linked to the MCLR will notice changes in their EMIs as the rates are periodically reset. These adjustments are contingent upon the loan’s reset period, which means that borrowers may experience either an increase or a decrease in their EMIs, depending on the prevailing MCLR rate and the duration of their loan.
For instance, home loan borrowers and car loan customers may observe an increase in their EMI payments due to the implementation of new rates and adjustments in the MCLR.
Nevertheless, the ultimate lending rate for each borrower will differ based on several factors, including salary, income level, and CIBIL score. Financial institutions use these criteria to evaluate the creditworthiness of the borrower and establish the final interest rate applicable to the loan.
