Do you also have a home or auto loan from Bank of Baroda? Then there is some big news for you! Bank of Baroda has reduced its interest rates. Know how this reduction in MCLR will have a direct impact on the EMI of your loan, and when the new rates will be applicable.
If you have a home or auto loan from Bank of Baroda, then there is some big news for you. The bank has announced a cut in its Marginal Cost of Funds-Based Lending Rate (MCLR). This decision will benefit those customers whose loans are linked to MCLR. This change will come into effect from September 12. In this article, we will know what this cut in MCLR is and what effect it will have on your EMI.
What is MCLR, and how much has it been cut?
MCLR means Marginal Cost of Funds-Based Lending Rate. This is a rate on the basis of which banks decide the interest rate of their different types of loans. Bank of Baroda has reduced its overnight MCLR by 10 basis points, bringing the rate to 7.85%. Apart from this, the three-month MCLR has been reduced by 15 basis points, after which the rate has become 8.20%.
Who will be affected?
This reduction will especially benefit those who have taken floating-rate loans from the bank. Due to the reduction in MCLR, the EMI of your loan can also be reduced, which will make your loan cheaper.
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Check out the new MCLR rates here:
Overnight MCLR: 7.85% (10 basis point cut)
Three-month MCLR: 8.20% (15 basis point cut)
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One-month MCLR: 7.95% (no change)
Six-month MCLR: 8.65% (no change)
One-year MCLR: 8.80% (no change)
Why is MCLR important?
MCLR was introduced by RBI in April 2016 to pass on the benefits of changes in interest rates to customers quickly and transparently. It is a key benchmark for determining interest rates for various types of loans, such as home, personal, and corporate loans. When a bank reduces MCLR, borrowing becomes cheaper, and when it increases it, the cost of borrowing increases.
