Bank Loan News : Most consumer loans are based on a one-year marginal cost based lending rate. In such a situation, personal loans, auto and home loans can become expensive due to increase in one-year MCLR.
Bank Loan News : New Delhi. After the Reserve Bank of India (RBI) increased the repo rates, many banks made the loan expensive by increasing the interest rates. Now the name of a big bank has been added to this list.
Actually, ICICI Bank of the private sector has given a big blow to its customers. The bank has increased the marginal cost based lending rate (MCLR) by 20 basis points or 0.20 percent for different periods. Now taking loan from bank will become expensive. The new rates of the bank have come into effect from July 1, 2022.
According to the ICICI Bank website, now the interest rates of one night tenor MCLR have increased from 7.30% to 7.50%. The interest rates of MCLR for one month tenor have also gone up from 7.30% to 7.50%. The interest rates of MCLR with tenure of 3 months have gone up from 7.35% to 7.55%. Apart from this, the interest rates of 6-month MCLR have been increased from 7.50% to 7.70% while the one-year MCLR interest rates have been increased from 7.55 percent to 7.75 percent.
Your EMI will increase
With the increase in MCLR, the EMI on term loans is expected to increase. Most consumer loans are based on marginal cost based lending rate. In such a situation, due to increase in MCLR, personal loans, auto and home loans can become expensive.
Know What is MCLR?
Significantly, MCLR is a method developed by the Reserve Bank of India (RBI) on the basis of which banks determine the interest rate for the loan. RBI introduced MCLR in the country from 1st April 2016. Before that, all banks used to fix interest rate for customers on the basis of base rate. Banks are using MCLR in place of base rate since April 2016. Now any increase or reduction in MCLR by banks also affects new and existing creditors.