Canara Bank has recently announced a hike in its loan interest rates, impacting borrowers who are reliant on its financial services. The bank has made an upward revision in its Marginal Cost of Funds based Lending Rates (MCLR). This article will delve into how this change might impact your ongoing or prospective loans.
The increment by Canara Bank in its MCLR is by 0.05%. The new rates have already been implemented. It’s crucial for borrowers to understand these rates and how they influence loan tenures.
For most loan tenures, the bank has introduced an increase in MCLR. Specifically, the overnight MCLR now stands at 7.95%, while the one-month MCLR is fixed at 8.05%. Additionally, the bank has set the three-month MCLR at 8.15%, six-month MCLR at 8.50%, and the one-year MCLR has been revised to 8.70%.
For those unfamiliar with the term, the MCLR is essentially the minimum interest rate below which a bank is not permitted to lend. This rate is a benchmark that ensures fairness and transparency in the lending process.
What does this mean for borrowers?
If you’re an existing borrower with a loan linked to the MCLR of Canara Bank, your equated monthly installments (EMIs) might see a change, aligning with the new rates. For potential borrowers, it’s essential to factor in these revised rates when budgeting for a loan. While a 0.05% increase might seem minimal, it can significantly affect the total interest paid over a long-term loan.
interest rate fluctuations are an integral part of the financial landscape. As a borrower, staying updated with these changes and understanding their implications can aid in better financial planning. If you’re considering a loan or have an existing one, it might be worth consulting with your bank or a financial advisor to understand the potential impact on your finances.