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 rise is just a month after SBI decreased its home loan rates by 75 basis points following RBI’s announcement of the same.
While the external benchmark lending rate has been kept constant at 7.05 percent, 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 percent from the previous 7.45 percent.
There has also been a substantial leap to 9.20 percent from a previous 8.90 percent for a sum up to 1 crore and up to 9.70 percent from 9.40 percent for an amount of Rs. 1 crore to Rs . 2 crores in the effective rates for a loan against property (P-LAP). Other banks are also expected to make drastic changes after the biggest lender.