Why My SBI Home Loan Interest Rate Not Changed?

I took a loan 2 years back, but the interest rate has remained the same despite it not being fixed. To know about that, I called a friend who works at SBI and asked why my SBI home loan interest rate not changed? He told me that the Bank may do the interest rate reset under EBLR from time to time as per the Banks extant guidelines in force.  

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My friend informed me that I must have taken a fixed interest loan. In a fixed interest rate situation, the interest rate is fixed for the duration of the loan, regardless of changes in the market. In a floating interest rate scenario, however, the interest rate is subject to fluctuations in the market and may go down or up.

I was suggested to visit my SBI home branch, if I want to change my home loan interest rate. I hope this information will help you with your query about why my SBI home loan interest rate not changed. 

Hi there,

Coincidentally, I too had this question, why my SBI home loan interest rate not changed, some time ago. I did some digging and found out that every loan with a variable interest rate is correlated with an internal or external benchmark. So, to find out which benchmark our house loan is tied to, we must review our sanction document. Let me explain it in simpler words.

Why My SBI Home Loan Interest Rate Not Changed?

It can be because of the following reasons;

• It may be because your loan is sanctioned on a fixed interest rate basis. 

• In a fixed interest rate circumstance, the interest rate is fixed for the duration of the loan, regardless of changes in the market. 

• In a floating interest rate scenario, however, the interest rate is subject to fluctuations in the market and may go down or up.

• The Bank may periodically reset the interest rate under the EBLR in accordance with the current policies in effect.

• So, borrowers of floating-rate home loans who maintain a consistent account. Then on the switchover date can be transferred to the new interest rate structure.

So, if you choose SBI's fluctuating rate of interest, the interest rate will be changed. You can follow these steps for changing your interest rate.

1. You can visit the bank and submit the required request to convert to the new interest rate structure.

2. The customer must pay a one-time switchover cost plus GST for this. A one-time switchover fee of Rs. 1000 plus taxes is required for this.

3. The external benchmark rate (EBR), which is linked to the Reserve Bank of India's repo rate, is the basis for the current 8.40% p.a. interest rate for SBI home loans (RBI). Any adjustments to the repo rate will cause the EBR to fluctuate.

If your rate of interest is not changing then you can ask SBI to reduce the rate along with the switchover fees.

I hope now you know why my SBI home loan interest rate not changed.