MCLR rate cut: How it impacts your loans2 min read . Updated: 16 Mar 2019, 08:30 AM IST
- If you are opting for a floating rate loan, MCLR is the benchmark rate to which you loan will be linked
- If your home loan MCLR is linked to 6-month MCLR, your interest rate will get reset only after the completion of six months in case there is a change in the rate at the time of the reset
Mumbai: In the first week of this month, at least five top banks have cut their marginal cost of funds based lending rate (MCLR). If you are opting for a floating rate loan, MCLR is the benchmark rate to which you loan will be linked. Top banks including Kotak Mahindra Bank Ltd, Bank of Baroda, Punjab National Bank, Union Bank of India and Allahabad Bank have cut their MCLR in the range of 5-10 basis points (bps). One bps is one-hundredth of a percentage point. The move comes close to a month after the Reserve Bank of India (RBI) in a surprise move cut repo rate, the rate at which central bank lends to commercial bank, by 25 bps to 6.25%.
Select your Category