Decoded External Benchmark Linked Lending Rates for Floating Home Loans & Personal Loans

Updated on: 14 Dec 2021 // 12 min read // Home Loans
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Ahead of the largest festival season of the country, Indian banks have welcomed a new floating rate lending regime for personal loans, home loans and loans for MSMEs and cheered customers with lowered loan rates.

The Reserve Bank of India had mandated all public and private banks to link new floating rate loans to external benchmarks: repo rate, 3-month or 6-month treasury bill yield, or other benchmarks published by Financial Benchmarks India Pvt. Ltd., from 1 October 2019.

Thus all new floating rate customers will borrow according to External benchmark lending rates EBLR/EBR, i.e., Repo Linked Lending Rate (RLLR) or Treasury Bills Lending Rate (TBLR) as against Marginal Cost of Lending Rates (MCLR).

Check Home Loan Interest Rates Online

It is observed that the new external benchmarks based lending rates will bring in more transparency and swiftness in transmitting lowered cost of lending by central bank to the final customers. The previous regime, MCLR, was based on bank’s internal policy and thus there was low transmission of lending rates to the customer.

The experts believe that new regime will result in lowered rate when external benchmarks indicate so. The existing customers will continue to pay according to the previous regime. They can however can apply for the switch on payment of a processing fee.

Let’s take a quick look at what are the latest EBR/EBLR and TBLR rates for top 5 banks now:

SBI Home Loan Interest Rate Structure (Floating): External Benchmark Rate (EBR) is 8.05%(Repo Rate+2.65%)

Home Loan:

Loan AmountEffective Home Loan Rate (% p.a.) for salaried individuals

Up to 30 Lakh

EBR + 0.15= 8.20%

30 Lakh to 75 Lakh

EBR + 0.40= 8.45%

Above 75 Lakh

EBR + 0.50= 8.55%

Terms & Conditions:

  • Non-Salaried Customers to pay a premium of 15 bps.
  • For Loan up to Rs 30 Lakhs, if LTV ratio is 80% to 90%, 10bps premium of 10 bps will be added.
  • For customers under risk grade (4 to 6) a premium of 10 bps will be added.
  • Women applicants to enjoy concession 05 bps.


    The effective rates vary from 9.90% to 10.75%.

Source: SBI website

Also Read: The Moneycontrol Show| How Repo-Linked Loans Will Impact Borrowers- With Mr Raj Khosla

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