A "low interest" loan shouldn't mean you have very little interest in paying it back!
Axis Bank is one of the most noticeable banks in the country. The bank provides exceptional financial products and services to the public making it one of the most customer centric banks in India. The home loans provided by the bank is provided with notable innovation and economical rates of interest. The base rate, or MCLR Rate of Axis Bank have been constantly reducing over the last few years, giving customers a great deal on loans. Currently headquartered in Mumbai, the bank has grown to be one of the leading banks in the country in terms of growth and network.
MCLR rates effective from 18 January 2022 are:
| Tenor | Axis Bank MCLR Rate |
|---|---|
| Overnight | 7.85% |
| 1 month | 7.85% |
| 3 months | 7.95% |
| 6 months | 8.00% |
| 1 year | 8.05% |
| 2 years | 8.15% |
| 3 years | 8.20% |
| Revised Date | Overnight MCLR | 1 Month MCLR | 3 Months MCLR | 6 Months MCLR | 1 Year MCLR | 2 Year MCLR | 3 Year MCLR |
|---|---|---|---|---|---|---|---|
| 18 July 2022 | 7.80% | 7.80% | 7.90% | 7.95% | 8.00% | 8.10% | 8.15% |
| 18 June 2022 | 7.75% | 7.75% | 7.85% | 7.90% | 7.95% | 8.05% | 8.10% |
| 18 April 2022 | 7.20% | 7.20% | 7.30% | 7.35% | 7.40% | 7.50% | 7.55% | 18 January 2022 | 7.15% | 7.15% | 7.25% | 7.30% | 7.35% | 7.45% | 7.50% |
| 18 November 2021 | 7.15% | 7.15% | 7.25% | 7.30% | 7.35% | 7.45% | 7.50% |
| 18th January 2021 | 7.20% | 7.20% | 7.30% | 7.35% | 7.40% | 7.50% | 7.55% |
| 18th December 2020 | 7.25% | 7.25% | 7.35% | 7.40% | 7.45% | 7.55% | 7.60% |
| 18th November 2020 | 7.25% | 7.25% | 7.35% | 7.40% | 7.45% | 7.55% | 7.60% |
| 18th September 2020 | 7.30% | 7.30% | 7.40% | 7.45% | 7.50% | 7.60% | 7.65% |
| 18th August 2020 | 7.35% | 7.35% | 7.45% | 7.50% | 7.55% | 7.65% | 7.70% |
| 18th July 2020 | 7.45% | 7.45% | 7.55% | 7.60% | 7.65% | 7.75% | 7.80% |
| 18th June 2020 | 7.55% | 7.55% | 7.65% | 7.70% | 7.75% | 7.85% | 7.90% |
| 18th May 2020 | 7.55% | 7.55% | 7.70% | 7.75% | 7.80% | 7.90% | 7.95% |
| 18th April 2020 | 7.60% | 7.60% | 7.80% | 7.90% | 7.95% | 8.05% | 8.10% |
| 18th March 2020 | 7.75% | 7.75% | 7.95% | 8.05% | 8.10% | 8.20% | 8.25% |
| 18th February 2020 | 7.80% | 7.80% | 8.00% | 8.10% | 8.15% | 8.25% | 8.30% |
| 18th January 2020 | 7.80% | 7.80% | 8.00% | 8.10% | 8.15% | 8.25% | 8.30% |
| 18th December 2019 | 7.80% | 7.80% | 8.00% | 8.10% | 8.15% | 8.25% | 8.30% |
| 18th November 2019 | 7.90% | 7.90% | 8.10% | 8.20% | 8.25% | 8.35% | 8.40% |
| 18th October 2019 | 8.00% | 8.00% | 8.20% | 8.30% | 8.35% | 8.45% | 8.50% |
| 18th September 2019 | 8.10% | 8.10% | 8.30% | 8.40% | 8.45% | 8.55% | 8.60% |
| 18th Feb, 2019 | 8.50% p.a. | 8.50% p.a. | 8.65% p.a. | 8.80% p.a. | 8.90% p.a. | 9.00% p.a. | 9.05% p.a. |
| 18th Jan, 2019 | 8.50% p.a. | 8.50% p.a. | 8.65% p.a. | 8.75% p.a. | 8.85% p.a. | 8.95% p.a. | 9.00% p.a. |
The first thing to keep in mind before switching from base rate to MCLR is the cost of transfer. Banks usually charge a borrower for switching from base rate to MCLR. This fee can range from anywhere between Rs.5,000 and Rs.20,000, depending on the bank. If you only have a few more months of EMI to be paid, consider this before planning to switch to MCLR.
The most important aspect to keep in mind before making a switch is the current outstanding balance, EMI and the interest cost on transfer of loan to MCLR. Consider the outstanding amount and calculate the interest payable on that amount in base rate and MCLR to work out which will be the more economical alternative.
If you still manage to save a considerable amount of money after bearing in mind the fees and the new interest rate, it would be a wise decision to switch over to the MCLR system.
Switching from base rate to MCLR in Axis bank involves the following steps.
All existing customers have an option to switch from the existing system to the MCLR system without considerably changing the operative interest rate on the loan. This would effectively be free of charge and will also be provided instantaneously, with immediate effect.
Switching from the FRR//PLR/I-Base based benchmark to MCLR in Axis bank involves the following steps.
Request the bank in writing to switch your home loan from the base rate scheme to MCLR
After the loan is linked, request the banker to reduce the quantum of your interest. This may include a one-time fee, but the rate of interest payable by you will reduce henceforth
Every bank has the liberty to set their own MCLR. This is the base rate, below which a bank may not lend. Therefore, it is possible for different banks to have different MCLRs.
All existing loans that are linked to the base rate will continue to be linked in the base rate system until complete repayment. All existing borrowers will, however, have the option to shift to the MCLR linked loan at mutually acceptable terms
Therefore, in the case of partially disbursed loans under the base rate system, even the subsequent disbursements will be linked to the base rate system.
More often than not, it is advisable to opt for the MCLR with a shorter rest period. This is so because interest rates on loans have been falling constantly over the past few years. However, if one speculates the rates of interest to rise in future, it would be advisable to opt for the MCLR with a longer reset period. In short, if you speculate the interest rates to drop, opt for the 6 months MCLR. Whereas, if you speculate the rates of interest to rise, opt for the 12 month MCLR.
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