State Bank of India, the largest lender of India has hiked both its home loan rates and effective interest rates on personal loans against a property by 30 basis points. This has been done as a measure against credit risk for borrowers amidst the ongoing economic crisis caused by COVID-19 in the country.
This increase is just a month after SBI had reduced its home loan rates by 75 basis points after RBI’s announcement regarding the same.
While the external benchmark lending rate has been kept constant at 7.05 per cent, a significant increase has been witnessed for the effective rate of home loans. For loans above 75 lakh, SBI has hiked the effective rate to 7.75 per cent from the previous 7.45 per cent.
The effective rates for a loan against property (P-LAP) have also witnessed a significant jump to 9.20 per cent from a previous 8.90 per cent for an amount up to 1 crore and up to 9.70 per cent from 9.40 per cent for an amount of Rs. 1 crore to Rs. 2 crores. Following the biggest lender, other banks are also likely to make significant changes.