BIG NEWS: SBI Slashes Lending Rates! Cheaper Home Loans & Lower EMIs Starting December 15
Date: December 13, 2025 Category: Personal Finance / Banking News
If you have been waiting for some relief on your monthly loan payments, the wait is finally over.
In a major move following the Reserve Bank of India’s (RBI) recent policy updates, the country’s largest lender, State Bank of India (SBI), has announced a significant cut in its lending rates. Whether you are a new home buyer or an existing borrower, this news brings holiday cheer just in time for the New Year.
๐ The Headlines: What Changed?
Effective Monday, December 15, 2025, SBI is reducing interest rates across several benchmarks. Here is the breakdown of the cuts:
External Benchmark Linked Rate (EBLR): Cut by 25 basis points (0.25%)
New Rate: 7.90% (down from 8.15%)
Impact: This is massive for borrowers with loans linked directly to the Repo Rate. You will see the fastest transmission of this benefit.
MCLR (Marginal Cost of Funds-Based Lending Rate): Cut by 5 basis points
New 1-Year Rate: 8.70% (down from 8.75%)
Impact: If your loan is linked to MCLR (common for older loans or business loans), you will see a marginal dip in your interest burden upon your next reset date.
Base Rate: Cut by 10 basis points
New Rate: 9.90% (down from 10.00%)
๐ฐ What Does This Mean for Your Wallet?
The biggest winners here are those with EBLR/Repo-linked home loans.
A Quick Calculation: If you have a home loan of ₹50 Lakh for 20 years at 8.50%:
A 0.25% drop could save you approximately ₹800 - ₹900 per month in EMIs.
Over the full tenure of the loan, this adds up to savings of over ₹2 Lakhs in interest!
⚠️ The Flip Side: Deposit Rates
As is tradition, when loan rates go down, deposit rates often follow. SBI has also tweaked interest rates on select Fixed Deposits (FDs).
"Amrit Vrishti" (444 Days): Rate reduced to 6.45% (from 6.60%).
2 to 3 Year FDs: Reduced by 5 basis points to 6.40%.
๐ ️ What Should You Do Now?
Check Your Loan Regime: Log in to your SBI app or check your loan statement. If you are still on the old "Base Rate" or "MCLR" system, this might be the perfect time to request a switch to the EBLR (Repo-linked) regime to fully benefit from the 25 bps cut.
Wait for Monday: The new rates kick in on December 15. Expect to see the changes reflected in your account or EMI schedule shortly after.
Review Your FDs: If you were planning to book a specialized FD like Amrit Vrishti, you might want to lock it in before further cuts happen, or explore other investment avenues.
๐ฃ️ The Bottom Line
SBI often sets the trend for the Indian banking sector. With this aggressive cut, expect other public and private banks to follow suit in the coming days. If you are shopping for a loan, the market just got a lot more buyer-friendly!
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