Be ready to take a loan at a higher interest rate from the State Bank of India (SBI) and Axis Bank as both the banks have increased their marginal cost of lending rate (MCLR).
MCLR is a benchmark interest rate, which is the minimum rate at which banks are allowed to lend.
The country’s largest lender State Bank of India (SBI) has hiked MCLR by 10 basis points (bps) across all tenors, with effect from April 15, 2022. While Axis Bank has hiked its MCLR by 5 basis points across tenures, with effect from April 18.
Now after this, all types of loans such as home, auto and other will become expensive. However, those loans which will be linked to external benchmarks like repo rate, will not have any effect on them.
How much do you have to pay now?
If you have taken a loan of Rs 20 lakh from SBI for 20 years and are paying 7 percent interest on it, then your EMI of Rs 15,506 will come.
But now your EMI will increase to Rs 15,626 as the interest rate hiked to 7.10 percent. That means you will have to pay Rs 1,440 more as your EMI.
Recently, Bank of Baroda also hiked MCLR by 5 bps across tenures. The benchmark one-year tenor MLCR is at 7.35 per cent with effect from April 12, 2022.