India’s Largest Government Bank Cuts Loan Rates: How Much Will Your EMI Drop?

New Delhi: Following the recent 25 basis points cut in the repo rate by the Reserve Bank of India (RBI), the country’s largest government bank, State Bank of India (SBI), has reduced interest rates across its loan portfolio. The move is expected to make borrowing cheaper for both retail and corporate customers, resulting in lower EMIs.

SBI Reduces Key Lending Rates
SBI has cut interest rates on all its major loan benchmarks, including MCLR (Marginal Cost of Funds-Based Lending Rate), EBLR (External Benchmark Lending Rate), and RLLR (Repo-Linked Lending Rate). The bank has also revised its BPLR and base rates, ensuring that the recent RBI rate cut benefits borrowers immediately.

Here’s how MCLR rates have changed:

• Overnight & 1-month MCLR: 7.90% → 7.85%
• 3-month MCLR: 8.30% → 8.25%
• 6-month MCLR: 8.65% → 8.60%
• 1-year MCLR: 8.75% → 8.70%
• 2-year & 3-year MCLR: Reduced by 5 basis points

These reductions will provide noticeable relief to borrowers on both short-term and long-term loans.

EBLR and RLLR Rate Cuts
SBI has also reduced its external benchmark rates:

• EBLR: 8.15% → 7.90%
• RLLR: 7.75% → 7.50%

These changes, effective from 15th December 2025, are directly linked to the RBI repo rate. Borrowers with loans tied to EBLR and RLLR can expect their interest rates and EMIs to decrease, depending on loan terms and risk categories.

Impact on Borrowers
With these cuts, taking a loan becomes cheaper, whether for buying a home, car, or for corporate financing. For instance, borrowers with large home loans of ₹25 lakh, ₹50 lakh, or ₹75 lakh could see substantial savings every month in their EMIs.

As the repo rate continues to influence lending rates, customers should review their loan agreements to understand the exact benefits they can avail under the new rate regime.