- Date : 21/07/2022
- Read: 3 mins
New interest rate on home loans post RBI MCLR rate hike
The RBI has hiked the repo rates to 4.9% in the last quarter from 4%. The repo rate was hiked across two policy meets- one unscheduled meet in May and one scheduled meet in June. This has led to the banks increasing the interest rates on their loans. Some banks like the Bank of Baroda were offering low interest rates compared to the other banks. But the bank has increased its MCLR by 10 to 15 bps on certain tenures.
Your EMIs are set to increase if you have a car loan, personal loan, home loan, etc., from the bank. A hike in the MCLR rate affects the existing MCLR-based loans, and the increase in interest rates is passed to the customer by the MCLR. The new rates of MCLR will be applicable from 12 July.
Related: How to manage your new EMI post RBI repo rate hike
Bank of Baroda hikes MCLR across various tenures
The MCLR on one-year tenures has increased from 7.5% to 7.65%. The six-month tenure of MCLR has been hiked from 7.35% to 7.45%. For the three-month tenure, the MCLR has been hiked from 7.25% to 7.35%. The MCLR on one-month and overnight tenure remains the same at 7.2% and 6.8%, respectively.
Also, the bank repo-linked lending rate has been hiked to 7.45%. This includes the repo rate of 4.9% and markup of 2.55%. The car loans offered by the bank are available from 7.7% to 10.95%, whereas the pre-owned car loan rate starts from 10.2%. Two-wheeler loans start from 7.95%.
The banks set MCLR loan interest rate, and it defines the minimum interest rate that the bank can offer. For personal loans, if you have an account with the Bank of Baroda, you can get interest rates starting from 10.95%. The personal loan interest rate starts at 12.95% for people with other bank accounts.
The Bank of Baroda is a listed company, and the share price close on 12 July was Rs 108.6. The stock has given a 30% YTD return this year so far. This contrasts with the Nifty, which has fallen 8% in the same period.
Conclusion
The hike in MCLR will affect the new and old loans taken from the bank. The MCLR rate defines the lowest interest rate offered by the banks. Bank of Baroda has hiked the MCLR by 10 to 15 bps across various tenures. Your EMIs will go up with the increased interest rates. The interest rates are going up this year in line with the RBI's hiking of the repo rate by 90 BPS in the first quarter of this financial year. Check out the list of Banks offering best interest rates on savings account post RBI repo rate hike.
