Yes — State Bank of India (SBI) has cut its External Benchmark Linked Lending Rate (EBLR) to 7.90%, down from 8.15%, effective December 15, 2025 — a 25 basis point (0.25%) reduction passed on to borrowers following the Reserve Bank of India’s (RBI) repo rate cut. This reduction will lower your home loan EMI if your loan is linked to the EBLR, but the exact savings depend on your loan amount, remaining tenure, and SBI’s credit risk premium/spread applied to your account.
1. What SBI Just Did — The New Lending Rate Reality (Focus on “sbi lending rate cut”)
Late in 2025, RBI cut its key repo rate by 25 basis points to support growth amid softening inflation conditions. In response, SBI—the largest bank in India—moved quickly to pass on the benefit:
- EBLR cut from 8.15% to 7.90% (benchmark rate)
- MCLR trimmed modestly across tenors
- Base rate and BPLR lowered too
- Effective Date: December 15, 2025
- These new numbers apply to both existing and new loans where terms permit transmission.
Importantly, for home loans tied to EBLR, this is the headline cut that influences your interest rate and EMI most directly.
What is EBLR?
EBLR = External Benchmark Linked Rate. SBI sets it against an external reference (RBI’s policy rates). Your actual interest rate = EBLR + your individual Credit Risk Premium (CRP) + Bank Spread. Only the benchmark base (EBLR) has been cut here; your personal spread/CRP is unaffected by SBI’s policy change (unless renegotiated).
2. Why This Matters for Your Home Loan EMI
EMI (Equated Monthly Installment) is calculated based on three things:
- Outstanding loan principal
- Interest rate (% per annum)
- Remaining loan tenure (years)
When the interest rate drops — even by a quarter point — EMIs fall because lenders charge less interest on the outstanding principal.
From real-world local media reports (based on a ₹50 lakh loan, 20‑year tenure example):
- Old EMI @ 8.15% → approx. ₹42,390/month
- New EMI @ 7.90% → approx. ₹41,511/month
- Monthly savings: ~₹779
- Total interest saved over full term: ₹1.86 lakh+
- If those monthly savings were invested instead (e.g., in SIP), you could accumulate ~₹7+ lakh over 20 years (growth assumes compounded returns).
Keep in mind: these figures are illustrative — your exact numbers depend on your loan amount, repayment schedule, and SBI’s spread attached to your account.
3. SBI Lending Rate Components — Clarified
Below is a simplified breakdown of SBI’s key lending benchmarks after the December 2025 revision:
| Rate Type | Prior to Dec 15, 2025 | Revised (Dec 15, 2025) | Change |
|---|---|---|---|
| EBLR (Base) | 8.15% | 7.90% | Down 0.25% |
| RLLR | 7.75% + CRP | 7.50% + CRP | Down 0.25% |
| MCLR (1‑yr) | 8.75% | 8.70% | Down 0.05% |
| Base Rate | ~10.00% | ~9.90% | Down ~0.10% |
What this means:
- If your loan is EBLR‑linked, your base interest rate is officially lower now.
- If your loan is MCLR‑linked, you’ll see a modest reduction.
- Your final rate = benchmark + spread, so the final impact varies across customers.
4. What Home Loan Borrowers Should Know
A. How Soon Will the Reduced Rate Reflect in Your EMI
The effective date is December 15, 2025. For floating‑rate home loans:
- Many loans reset either monthly or quarterly; for SBI, the next scheduled reset after 15 Dec should reflect this new benchmark rate in your January EMI (or the next cycle), depending on your reset date in the loan agreement.
- Some borrowers have noted on forums that changes may take one billing cycle to show in the SBI YONO app or statement.
B. Will the EMI Drop Automatically?
Yes — if your loan is truly floating‑rate with EBLR reset clauses, RBI‑linked cuts are normally transmitted automatically in the next reset. If you don’t see it:
- Contact your SBI branch or loan servicing desk
- Confirm your reset date
- Request an amortization schedule update to reflect the new rate
C. What if Your Loan is Fixed or Not Fully Floating?
If your loan has fixed segments or certain negotiated terms, the impact might be delayed or limited until those parts convert at reset dates.
5. What This Means for the Broader Borrowing Landscape
- SBI’s move comes amid a period where RBI cut the repo rate multiple times in 2025 to foster growth.
- Other lenders often follow suit; cheaper lending rates help stimulate housing demand and reduce monthly burdens — especially for long‑tenure loans.
- Borrowers with better credit scores might negotiate tighter spreads, maximizing the impact of the benchmark cut.
6. Quick EMI Savings Calculator (Rule of Thumb)
Approximate Savings per ₹1 Lakh Loan (20‑year):
- 0.25% rate cut ≈ ₹150–₹180/month saved
- ₹50L loan ≈ ₹770–₹800 saved per month
- Over 240 months (20 years) ≈ ₹1.8L+ interest saved overall
These are approximations; actual pricing varies by tenure and spread. For absolute precision, use SBI’s online EMI calculator or consult your latest loan schedule.
7. Practical Next Steps for Home Loan Holders
✔ Step 1: Check if your home loan is linked to EBLR (see your loan agreement/YONO details).
✔ Step 2: Note your loan reset date — when your next EMI will reflect the new rate.
✔ Step 3: Calculate your expected new EMI using SBI’s EMI tool or a trusted financial calculator.
✔ Step 4: If not reflected by your next cycle, contact SBI support with your loan account number.
✔ Step 5: If your spread is high, consider renegotiation or refinancing offers elsewhere — after all, the benchmark part has now reduced.
Conclusion: Rate Cut Means Real Savings — But Details Matter
From years of covering rate cycles and borrower impact, this is not just another press release — it’s a meaningful pass‑through of RBI policy cuts to India’s biggest lender’s customers. A 25 basis‑point reduction in EBLR is significant for floating‑rate home loans and translates into tangible monthly savings for borrowers.
However — and this is where many borrowers slip — your exact benefit hinges on your contract terms, reset schedule, and risk spread. The headline 7.90% is the new base, but what lands in your bank account or monthly bill statement depends on those finer points.
If you’re planning a home purchase soon or reviewing your current loan, take this shift as a cue to revisit your loan terms, check your reset timings, and ensure you’re not paying more than you should. This cut is designed to lighten your borrowing cost — and for many, it will do exactly that.
