State Bank of India (SBI) has reduced the loan interest rates by 0.25%. After this reduction, taking all types of loans from SBI has become cheaper. Now the interest rate of SBI home loan will start from 8% per annum. RBI has recently reduced the repo rate from 6.25% to 6.00%. After which banks have also started reducing the interest rates on FD and loans. Earlier, Punjab National Bank, Bank of India and Indian Bank had also reduced the interest rates on loans.
How Much Will You Save on EMI?
After banks reduce interest by 25 basis points, the EMI of home loan and auto loan will be reduced. Suppose you have taken a home loan of Rs 30 lakh for 20 years, So you will have to pay a total of 240 monthly EMIs. If we assume the first interest rate to be 9%, then the monthly EMI will be around Rs 26,992. Whereas in 20 years, you will have to pay a total of around Rs 34,78,027 as interest payment.
After the reduction of 25 basis points in the repo rate, the interest rate will come down from 9% to 8.75%. In such a situation, your EMI will come down to about Rs 26,511. You will have to pay Rs 481 less as EMI every month. Your total interest payment will also come down to about Rs 33,62,717 in 20 years. There will be a saving of about Rs 1.15 lakh on this.
FD Interest Rates Also Reduced
Along with reducing loan interest rates, State Bank of India (SBI) has also cut its fixed deposit (FD) interest rates by 0.10% to 0.25%. These new rates are effective from April 15, 2025. Now, for FDs of 1 to 2 years for FDs of 3 crores, the interest rate is revised up to 6.70%, below 0.10%. For FD with a tenure of 2 to 3 years, the interest rate has been reduced from 7% to 6.90%.
Other major banks are also making changes. HDFC Bank has reduced its savings account interest rate by 0.25%, making it the lowest in private sector banks. Meanwhile, Bank of India has discontinued its 400-day special FD scheme, which had earlier offered an attractive 7.3% interest rate. These changes mean that investors may need to reconsider their deposit strategies, especially stable and high returns.
Which Banks Have Reduced Loan Rates?
Several other major banks have reduced their debt interest rates even after the RBI decision to cut the repo rate. Chennai-based Indian Bank has reduced its repo-linked lending rate (RBLR) by 35 basis points, effective from April 11, 2025. Punjab National Bank (PNB) revised its RBLR from 9.10%to 8.85%, which has been reduced from 9.85 to 9.85%on 10 April. 2025. UCO Bank also joined it, reduced its lending rate, effective from April 10, 2025, in private banking sector, HDFC Bank has cut its savings account interest rate by 0.25%, now offered one of the lowest rates in private banks. These changes reflect a widespread trend of fall in interest rates, provide relief to borrowers but face challenges for traditional savings.
Essential Tips Before Taking a Home Loan
Check Prepayment Penalties- Many banks charge a penalty for repaying the loan before time. In such a case, get complete details about this from the banks, because on repaying the loan before time, the banks get less interest than expected. In such a case, some terms and conditions are imposed by them. Therefore, while taking a home loan, get complete information about this.
Monitor Your CIBIL Score- Your CIBIL score plays an important role in your debt approval process. The score of 700 or more is usually considered good by most banks. Ensure that your credit history is in good condition before applying for a loan.
Compare Bank Offers- Banks keep providing better offers to loan takers from time to time. In such a situation, before taking a loan, you should find out about the offers of all the banks. Because taking a loan in a hurry can prove to be wrong for you. Do proper research before taking a loan.
