In a major move following the Reserve Bank of India’s monetary policy, the State Bank of India (SBI) has reduced its benchmark lending rates by 25 basis points (bps) effective December 15, 2025. This comes after the RBI announced a repo rate cut aimed at supporting growth and reducing borrowing costs.
This decision means cheaper EMIs for millions of existing and new borrowers. It also subtly shifts the savings landscape with adjusted Fixed Deposit (FD) rates. Whether you’re repaying a loan or planning to borrow, this update could directly impact your finances.
How Repo Rate Cuts Influence Lending Rates
Let’s first understand how this change works behind the scenes and why it impacts your loans.
What is the Repo Rate?
The repo rate is the rate at which the RBI lends short-term funds to commercial banks. When the RBI cuts this rate, borrowing becomes cheaper for banks, which may pass on the benefit to customers by reducing their lending rates.
What is RLLR (Repo Linked Lending Rate)?
RLLR is a benchmark rate linked directly to the repo rate. It’s calculated as:
| RLLR = Repo Rate + Spread (bank margin) |
So, if the RBI cuts the repo rate, the RLLR also drops, making loans cheaper for borrowers whose loans are linked to it.
What is EBLR (External Benchmark Lending Rate)?
EBLR is the external benchmark rate (like repo, treasury yields, etc.) + bank spread. Most banks, including SBI, link EBLR to the repo rate.
| EBLR = External Benchmark + Credit Risk Premium |
This ensures quick transmission of rate changes to borrowers.
Why This Matters for You
- If your loan is linked to RLLR or EBLR, you’ll see your EMI reduce automatically in the next billing or reset cycle.
- New borrowers will enjoy lower starting rates, which improves eligibility and affordability.
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New SBI Lending Rates: Before vs After Cut
Here’s how SBI’s core lending benchmarks have changed post the repo rate cut:
| Benchmark | Previous Rate | New Rate (from Dec 15, 2025) | Change |
| External Benchmark Lending Rate | 8.15% | 7.90% | -25 bps |
| Repo Linked Lending Rate (RLLR) | 7.75% | 7.50% | -25 bps |
| 1-Year MCLR | 8.75% | 8.70% | -5 bps |
| Base Rate / BPLR | 10.00% | 9.90% | -10 bps |
Note: Final lending rates depend on your credit score, loan type, and other eligibility parameters.
Also Read: SBI Personal Loan | SBI Personal Loan Interest Rates | SBI EMI Calculator
Current SBI Home & Related Loan Interest Rates
Following the EBLR cut to 7.90%, SBI home loan and related loans have seen a downward revision. Here’s the latest chart:
| Loan Type | New Interest Rate (%) |
| Home Loan (Term Loan – TL) | 7.25% to 8.45% |
| Home Loan Maxgain (Overdraft) | 7.50% to 8.70% |
| Top-Up Loan | 7.75% to 10.50% |
| Top-Up (OD) Loan | 8.00% to 9.20% |
| YONO Insta Home Top-Up Loan | 8.10% |
| Loan Against Property (P-LAP) | 8.95% to 10.50% |
| Reverse Mortgage Loan (RML) | 10.30% |
These rates vary based on your CIBIL score and risk category.
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How Much Will You Save on EMI?
Lower interest rates mean lower monthly EMIs. Here’s an estimate of the savings based on common loan amounts and tenures:
| Loan Amount | Tenure | Monthly EMI Reduction | Annual Savings |
| ₹30 Lakh | 20 Years | ₹400 – ₹500 | ₹4,800 – ₹6,000 |
| ₹50 Lakh | 20 Years | ₹700 – ₹850 | ₹8,400 – ₹10,200 |
| ₹75 Lakh | 25 Years | ₹1,000 – ₹1,200 | ₹12,000 – ₹14,400 |
| ₹1 Crore | 30 Years | ₹1,400 – ₹1,600 | ₹16,800 – ₹19,200 |
If your loan is on a floating rate, the changes are automatic.
Also Check: EMI Calculator
Impact on SBI Fixed Deposits (FDs)
To align with the falling cost of funds, SBI has slightly reduced rates for some deposit schemes:
| FD Tenure / Scheme | Previous Rate | New Rate (Dec 15) | Change |
| Amrit Vrishti (444 Days) | 6.60% | 6.45% | -15 bps |
| Regular FD (2 to <3 Years) | 6.45% | 6.40% | -5 bps |
| Regular FD (5 to 10 Years) | — | 7.05% | — |
Seniors continue to get additional interest, usually 50 bps over the card rate.
Also Read: SBI FD Calculator
What Borrowers and Depositors Should Do Now
Here is what you can do if you are:
Existing Borrowers:
- Enjoy reduced EMIs starting next reset cycle.
- Maintain the same EMI to reduce the total loan tenure faster.
New Borrowers:
- Lock in lower starting interest rates.
- Compare multiple banks if possible, but SBI’s revised rates are now among the most competitive.
Depositors:
- Consider locking in long-term FDs now before further cuts.
- Explore debt mutual funds if looking for better tax-adjusted returns.
Suggested Read: SBI MSME Loan
Conclusion
SBI’s move to cut lending rates by 25 bps aligns with RBI’s effort to support growth and credit flow. Borrowers will benefit from cheaper EMIs, while savers must adapt to slightly lower deposit returns. Whether you’re borrowing or investing, now is the time to re-evaluate your financial strategy in this changing rate cycle.
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