If you’re considering getting a loan, exercise caution because doing so now in some banks will cost you more money. Actually, the banks are raising the interest rates on loans. As a result, getting a loan will be costly. With effect from August 12, public sector lender Canara Bank raised the rates for house loans and other loans. The marginal cost of funds-based lending rate (MCLR) was raised in August by the largest banks in India, including HDFC Bank, ICICI Bank, Bank of Baroda, and Bank of India.
Loan
The latest increase results in Canara Bank’s overnight MCLR being 7.95% and its one-month MCLR being 8.05%. The three-month MCLR is 8.15%, compared to the six-month MCLR of 8.50. The bank’s MCLR has a 1-year term and is 8.70%. These MCLRs will only be applicable to new loans, advances, and first disbursements made on or after March 12, 2023, as well as credit facilities that have been renewed, reviewed, or reset, and if the borrower has the choice to switch to an MCLR-linked interest rate.
Interest rate on banks
New loan customers will be directly impacted by the rise in bank interest rates. Banks typically lengthen the loan term rather than the monthly EMI when they raise the interest rates on their retail loans.
MCLR prices for HDFC Bank in August 2023
With effect from August 7, HDFC Bank raised the benchmark marginal cost of funds-based lending rates (MCLR) on a few different tenors by 15 basis points (bps). The MCLR will not alter for tenors longer than a year, though.
Rates for Bank of Baroda’s MCLR in August 2023
On a variety of tenors, the Bank of Baroda (BoB) has raised its benchmark lending rates by 5 basis points (bps). The revised prices will take effect on August 12th.
Loan Rate increases by ICICI, Punjab National Bank, and Bank of India
Bank of India, Punjab National Bank, and ICICI Bank have all updated their loan-related marginal cost-based lending rates (MCLR). According to bank websites, the new interest rates took effect on August 1. The lenders noted on their websites that the increased interest rates took effect on August 1, 2023.
No alteration to the repo rate
For the third day in a row, the Reserve Bank of India (RBI) left its main policy rates unchanged. The benchmark repurchase rate (repo) was decided upon by the MPC to remain at 6.50 percent. Shaktikanta Das, the governor of the RBI, revealed the meeting’s results on August 10.
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