Taking loan from these banks became expensive in December, check the list here

Bank Loan: India's big banks have recently made changes in their Marginal Cost of Lending Rates (MCLR). Some banks have increased their rates, while some have kept them unchanged. These changes directly affect the cost of the loan and the EMI of the customers. If you are planning to take a loan, then it is very important for you to understand these rates.

What is MCLR and its importance

Marginal Cost of Lending Rate (MCLR) is the minimum interest rate at which banks lend to their customers. This rate depends on the financial cost of banks, market conditions and other factors. The purpose of the MCLR system is to give banks the opportunity to fix a fair interest rate keeping in mind transparency and financial resources.

When the Reserve Bank of India (RBI) changes its repo rates, it also affects MCLR. This affects the loan rates of banks, especially those rates which are based on the MCLR system.

SBI and HDFC Bank performance

India's largest bank, State Bank of India (SBI), has kept its MCLR rates unchanged for December 2024.

Overnight MCLR: 8.20%

One-year MCLR: 9.00%

On the other hand, HDFC Bank has increased its overnight MCLR by 5 basis points to 9.20%, while the rates for other tenures have not changed.

Bank of Baroda and Canara Bank increase

Bank of Baroda has also revised its MCLR rates.

Overnight MCLR: 8.15%

One-year MCLR: 9.00%

Canara Bank has increased by 5 basis points across all tenures.

Overnight MCLR: 8.35%

One-year MCLR: 9.10%

PNB and IDBI Bank move

Punjab National Bank (PNB) has increased its MCLR rates by 5 basis points.

Overnight MCLR: 8.35%

One-year MCLR: 9.00%

IDBI Bank has not changed its rates.

Overnight MCLR: 8.45%

One-year MCLR: 9.20%

These rates have been implemented from December 12, 2024.

Tips for loan takers

Changes in MCLR rates have a direct impact on the cost of the loan. In such a situation, customers planning to take a loan should keep the following things in mind:

Compare MCLR rates of different banks: Different banks have variations in rates, which can affect the EMI of your loan.

Consider loan refinancing: If your existing loan is at a higher interest rate, you can consider refinancing to take advantage of the new rates.

Understand floating and fixed rate options: Floating rate loans benefit from reduced rates, while fixed rates offer stability.

Conclusion

The recent changes in MCLR rates are important for customers, especially those planning to take a home loan, personal loan or business loan. By comparing rates and planning wisely, customers can better manage their loan costs. It is also important to keep an eye on RBI policies and market conditions, as these influence changes in MCLR.