A "low interest" loan shouldn't mean you have very little interest in paying it back!
A "low interest" loan shouldn't mean you have very little interest in paying it back!
  •  Loading your search... Loading your search...
  • MCLR Rate is Rated as "Great!" by 26023 Users
    Home Loan BYTES FROM OUR KITCHEN

    MCLR Rate

    Individuals who have availed loans from lenders or banks before 1 April, 2016 will be paying the base rate and not MCLR. MCLR or marginal cost of funds based lending rate, when compared to the base rate compared, is seen to be lower by 5 to 50 basis points. This happens as the marginal cost of funds based lending rate is closely linked with the repo rate. Thus, there is better transmission of Reserve Bank of India’s rate cut to the borrower.

    MCLR Rates Offered By Top Banks:

    Bank Wise MCLR Rates (In %) - 19 Jan 2018
    Banks 3 years 2 years 1 year 6 months 3 months 1 month Overnight
    State Bank of India 8.10% 8.05% 7.95% 7.90% 7.85% 7.80% 7.70%
    HDFC Bank 8.40% 8.20% 8.10% 7.90% 7.85% 7.80% 7.80%
    ICICI Bank NA NA 8.20% 8.15% 7.90% 7.85% 7.85%
    Axis Bank 8.35% 8.30% 8.25% 8.15% 8.00% 7.80% 7.80%
    PNB 830% NA 8.15% 8.10% 8.00% 7.90% 7.75%
    Citibank NA NA 8.10% 8.15% 8.10% 8.10% 7.90%
    Indusind Bank 8.95% 8.90% 8.85% 8.80% 8.55% 8.25% 8.20%
    Kotak 8.60% 8.60% 8.60% 8.30% 8.10% 7.70% 7.70%
    Yes Bank NA NA 8.85% 8.55% 8.25% 7.95% 7.80%
    RBL 9.40% 9.30% 9.25% 9.20% 9.10% 9.05% 8.95%
    DBS NA NA 8.30% 8.10% 8.00% 7.90% 7.90%
    IDFC 8.70% 8.60% 8.50% 8.25% 7.90% 7.90% 7.85%
    Bank of India NA NA 8.30% 8.25% 8.10% 8.00% 7.70%
    Andhra Bank NA NA 8.40% 8.30% 8.20% 8.15% 8.10%
    Allahabad Bank 8.70% 8.65% 8.45% 8.35% 8.25% 8.05% 7.95%
    Nainital Bank 9.00% 8.65% 8.35% 8.20% 8.10% 8.05% 8.05%
    Lakshmi Vilas Bank NA NA 9.30% 9.25% 9.25% 9.25% 9.25%
    Jammu and Kashmir Bank 9.05% 9.00% 8.80% 8.40% 8.05% 7.90% 7.65%
    Bank of Maharashtra NA NA 8.65% 8.55% 8.20% 8.15% 8.10%
    Canara Bank NA NA 8.45% 8.40% 8.30% 8.25% 8.20%
    Central Bank of India NA NA 8.30% 8.25% 8.20% 8.10% 7.80%
    Bandhan Bank 10.74% 10.61% 10.20% 10.12% 10.11% 10.07% 10.05%
    United Bank of India NA NA 8.60% 8.45% 8.20% 7.95% 7.90%
    Union Bank of India 8.30% 8.25% 8.20% 8.05% 7.95% 7.90% 7.70%
    UCO Bank NA NA 8.45% 8.35% 8.15% 8.00% 7.90%
    Punjab and Sind Bank MCLR 8.85% 8.85% 8.40% 8.20% 8.10% 8.00% 8.00%
    Dena Bank NA NA 8.25% 8.20% 8.10% 8.05% 8.05%
    Federal Bank NA NA 8.90% 8.80% 8.70% 8.65% 8.60%
    South Indian Bank NA NA 9.00% 8.45% 8.15% 8.00% 7.90%
    Standard Chartered 9.05% 8.90% 8.55% 8.50% 8.45% 8.40% 8.05%
    Deutsche Bank NA NA 9.25% 9.00% 8.50% 8.00% 7.75%
    BNP Paribas 8.25% 8.00% 8.00% 7.65% 7.30% 7.30% 7.30%
    Corporation Bank NA NA 8.65% 8.60% 8.20% 7.90% 7.90%
    Indian Bank 8.55% NA 8.35% 8.25% 8.15% 8.05% 8.00%
    Karnataka Bank NA NA 8.75% 8.40% 8.35% 8.30% 8.25%
    Dhan Laxmi Bank NA NA 9.80% 9.65% 8.90% 8.85% 8.85%
    DCB Bank NA NA 9.72% 9.52% 9.05% 8.80% 8.60%
    City Union Bank NA NA 9.25% 9.15% 9.10% 9.05% 9.00%
    IDBI Bank 8.70% 8.60% 8.55% 8.35% 8.30% 8.10% 8.00%
    Syndicate Bank NA NA 8.45% 8.25% 8.10% 8.05% 8.00%
    OBC NA NA 8.40% 8.30% 8.25% 8.20% 8.10%
    Indian Overseas Bank 8.60% 8.50% 8.40% 8.20% 8.10% 8.05% 8.00%
    Karur Vysya Bank NA NA 9.00% 8.80% 8.65% 8.65% 8.65%

     

    What Is MCLR?

    MCLR (marginal cost of funds based lending rate) is the lowest interest rate that a bank or lender can offer. Most banks cannot offer HOME LOAN interest rates lower than the marginal cost of funds based lending rate. However, certain exceptions can be made when allowed by the Reserve Bank of India (RBI).

    Difference Between MCLR And Base Rate
    Difference Between MCLR And Base Rate

    The MCLR is a reference rate or internal benchmark for the financial institution. Marginal cost of funds based lending rate defines the process used to determine the minimum home loan rate of interest. The MCLR method was introduced in the Indian financial system by the Reserve Bank of India in the year 2016. The MCLR system has replaced the base rate system that was introduced in the year 2010. Thus, renewal of credit limits and sanctioning of loans is done as per MCLR norms.

    Aims Of MCLR:

    • Improving transmission of the policy rate into lending rates of the banks.
    • Bringing in transparency in the method followed by various banks for the determination of interest rates.
    • Ensuring the availability of bank loan at rates that fair to both lenders and borrowers.
    • Enabling the lenders and banks to be competitive and improve their worth in the long run.

    What Is MCLR Rate In Home Loan?

    MCLR is closely linked with the repo rate and fund costs of the banks. Thus, if there is a change in the repo rate, it will have an impact on your home loan’s floating rate of interest. If a bank brings down the marginal cost of funds based lending rate, the floating rate of interest associated with your home loan also comes down. This will not be affecting your equated monthly instalments but the tenure of the loan will get impacted.

    Difference Between MCLR And Base Rate

    MCLR Base Rate
    • MCLR or marginal cost of funds based lending rate has been introduced so that end borrowers can enjoy the benefits associated with repo rate cuts by the Reserve Bank of India (RBI). This has been implemented to make banking system even more transparent.
    • MCLR depends on factors like CRR (Cash Reserve Ratio), marginal cost of funds, tenor premium, and operating cost.
    • It is dependent on the repo rate changes made by the RBI.
    • Marginal cost of funds based lending rate can be different for different loan tenures.
    • The minimum rate of interest at which banks offer loan to their customers is called the base rate.
    • Base rate depends on different factors like profit, bank deposit rates, bank costs, etc.
    • It is not dependent on the repo rate set by the Reserve Bank of India.
    • Banks can choose to change the base rate quarterly.

    How to calculate MCLR?

    In order to calculate the marginal cost of funds based lending rate, you must consider all the borrowing sources for a bank. A bank borrows from several sources including, fixed deposits, current accounts, savings accounts, etc. The rate of interest in these borrowing sources can be used by you for the calculation of marginal borrowing cost. You must understand that the source of a bank’s funds is not only borrowing, but also the equity (retained or infused earnings). Thus, return on equity can also be expected.

    The formula prescribed by the Reserve Bank of India for calculation of MCLR is given below:

    Marginal cost of funds = Marginal borrowing cost x 92% + return on the net worth x 8%

    Banks must also maintain a cash reserve ratio of 4%. On this deposit, no interest is earned by the bank. Under MCLR, banks can avail some allowance called Negative Carry on CRR. Also, the operating costs must be considered and taken care of. There are several expenses of a bank that includes raising funds, opening branches, paying salary to its employees etc. These are not charged to the customers. Finally comes the discount or tenor premium. The reset period for the interest rate is called the tenor. It is directly proportional to the reset period i.e. the tenor is higher if the reset period is higher.

    Thus, MCLR depends on

    1. Tenor premium,
    2. Operating costs of the bank,
    3. Negative carry on Cash Reserve Ratio, and
    4. Marginal cost of funds.
    Impact of MCLR on your Home Loan
    Impact of MCLR on your Home Loan

    How To Convert Base Rate Home Loan To MCLR?

    The decision to switch to MCLR from base rate depends majorly on the actual benefits and the transfer cost. Various banks charge differently for this switch. However, there are certain banks that allow you to convert home loan to MCLR without charging anything.

    Example: Consider you have borrowed an amount of Rs.40 as home loan and you intend to repay it over a tenure of 20 years. The base associated with your home loan stands at 9.95%. After a period of three years from the commencement of the loan tenure, you would have paid an amount of Rs.38,468 as your monthly instalments. You have also paid an interest amount of Rs.11,63,514. If you choose to continue on the same path with your base rate, you will be paying a total interest of Rs.52,32,428. However, if you choose you switch to MCLR for your home loan at 8.55% for the remaining tenure (17 years in this case), you will be paying an interest of Rs.34,00,396. This is the amount that you pay for 17 years. So, the total interest that you pay for your home loan is (Rs.11,63,514 + Rs.34,00,396) which comes up to Rs.45,63,910. It shows that you save a substantial amount of Rs.6,68,518 by switching to MCLR from base rate.

    So, a spending a few thousand for converting to MCLR from base rate can reward you a hefty sum in the long run.

    Impact Of MCLR On Home Loans:

    MCLR is associated with floating rate home loans only. In case the home loan that you opted for comes with fixed rates of interest, MCLR will not affect the home loan. Change in repo rate will decide whether you gain or lose with the MCLR. The home loan interest is following a downward trend currently. So, it can prove to be beneficial to switch to MCLR if you are planning to purchase a house.

    RBI Guidelines About MCLR:

    • Fixed rate home loan will not be affected by MCLR.
    • Deposit balances and other borrowings are considered while computation of marginal cost of funds.
    • Banks must publish marginal cost of funds based lending rate for different tenors.
    • MCLR as on the sanction date of the floating rate home loan will stand the same till next reset date.

    MCLR Reviews

    • HDFC Limited Home Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have got the Home loan service with the HDFC LIMITED around 5 years ago. The customer support was good with the HDFC LIMITED and they have disbursed the loan amount within a week time. The rate of interest is floating which is average when compared with others.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jan 17, 2018
    • DHFL Home Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have a home loan from Dhfl,the service is good. The interest rate they quoted me is fine and the documents have been collected from my door step which was an easy process. Dhfl customer service is good. It is excellent experience with Dhfl home loan department.
      Was this review helpful? 0
      , noida
      Reviewed on Jan 17, 2018
    • HDFC Limited Home Loan
      "Excellent service"
      0.5 4.5/5 "Excellent!"
      Rate of interest offered by Hdfc LTD for the home loan department is 8.3% which is fine compared to other credit service providers in the market. The customer service is good and the documentation part was been smooth. It was an excellent experience with HDFC LTD home loan service.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jan 17, 2018
    • SBI Home Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have taken home loan from SBI and it was a very good loan experience. The loan amount was for Rs 44 lakhs with the rate of interest of 8.65% which is nominal when compared to all other banks. The process was quite long and it took 2-3 weeks to receive the loan amount. Customer service was good and they responded on time. The tenure of this loan is 30 years and it was overall a good service from SBI.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jan 16, 2018
    • HDFC Limited Home Loan
      "Excellent"
      0.5 5.0/5 "Blown Away!"
      I am running a home loan with HDFC ltd from the year of 2016. The services are good with HDFC LTD. The interest rate was good and they charged processing around between 2500 to 3000 rupees. They provided a doorstep service for the documentation. I have purchased a residential property too.
      Was this review helpful? 0
      , thiruvananthapuram
      Reviewed on Jan 16, 2018
    • HDFC Limited Home Loan
      "Average service"
      0.5 2.0/5 "Expected more"
      I have taken a home loan with HDFC limited the loan amount is 18 lakhs,rate of interest is very high as compared to others.I submitted documents,i paid my EMI through an ECS payment.I am not happy with rate of interest is not satisfactory hence i closed and got it swapped with different bank.
      Was this review helpful? 0
      , chennai
      Reviewed on Jan 16, 2018
    • Bank Bazaar Home Loan
      "Home Loan"
      0.5 4.5/5 "Excellent!"
      Not sure if this so smooth. Lets hope it get approved. Still can't believe if it will take care of all the intricacies. Blazingly fast and very intuitive user interaction. Give a sense of secure connection even for a non techie user by applying proper logos/icons in proper places. Kudos!!!
      Was this review helpful? 0
      , bangalore
      Reviewed on Jan 16, 2018
    • LIC Housing Home Loan
      "Good service"
      0.5 2.0/5 "Expected more"
      Around 2 years ago , I have got the home loan from LIC HOUSING FINANCE. The customer support of LIC HOUSING FINANCE helped me to get the loan on time. They have disbursed the loan amount within the time period but the required loan amount has not disbursed and I am not satisfied with it. The rate of interest is 9.5% which is fixed for 2 years.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jan 15, 2018
    • Bank Bazaar Home Loan
      "Excellent website "
      0.5 5.0/5 "Blown Away!"
      Really Mind blowing your bankbazar. Com website thanks for guide me GOD Bless U And Your Co. Pls praying for us our loan sanction very soon and we pay your loan Amt as soon as possible and I also Spread msg for your best and fast service about loan
      Was this review helpful? 0
      , mumbai
      Reviewed on Jan 13, 2018
    • ICICI Bank Home Loan
      "Normal service"
      0.5 4.0/5 "Great!"
      I had taken a home loan from ICICI BanK during the year 2005. The rate of interest was high. That home loan was completed during the year of 2015. It was very hard to reach the customer support and the process was lengthy too. On the same lines, even the processing is also little bit high compared to other bankers.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jan 13, 2018
    • LIC Housing Home Loan
      "Average service"
      0.5 3.5/5 "Pretty good"
      I have got the home loan from LIC HOUSING FINANCE around 6 years ago. The customer support team is average with LIC HOUSING FINANCE. The rate of interest and the charges are high with LIC HOUSING FINANCE. and it is floating interest rate as well.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jan 12, 2018
    • Punjab National Bank Home Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have taken a housing loan from PNB housing finance and the loan experience was very good. The loan amount was for Rs 30 lakhs with the rate of interest of 8.5% which is nominal rate when compared to other sources. The process was delayed and it took 15-20 days to receive the loan amount. Customer service was good and they collected documents on time. The tenure of this loan is 20 years and it was overall a good service from PNB.
      Was this review helpful? 0
      , mohali
      Reviewed on Jan 12, 2018
    • DCB Bank Home Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have taken Home loan from DCB and the loan experience was good, the loan amount was for Rs 8.60 lakhs with the rate of interest of 11% flat which was a little higher when compared to other banks. The process was good and i received my loan amount within 10-15 days. Customer service was good and they collected all the documents from me on time. The tenure of the loan is 15 years and it was a good service that I received from DCB.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Jan 12, 2018
    • Axis Bank Home Loan
      "Excellent service"
      0.5 4.0/5 "Great!"
      I have applied for the home loan with Axis bank and I got good response from axis bank with regards to my home loan application. The loan would get approved with in 15days of time. The customer support and the response part is good with the AXIS bank.
      Was this review helpful? 0
      , visakhapatnam
      Reviewed on Jan 12, 2018
    • HDFC Limited Home Loan
      "Best service"
      0.5 5.0/5 "Blown Away!"
      I have a housing loan with HDFC LTD and my loan experience was good with HDFC Ltd. The loan amount was for Rs 25 lakhs with the rate of interest of 8.9% which is nominal when compared to all other banks. The process was smooth and i received my loan amount within 1 week. Customer service was good and they provided door step service to collect the documents. The tenure of this loan is 20 years and it was overall a good experience with HDFC ltd
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Jan 12, 2018
    • LIC Housing Home Loan
      "Good"
      0.5 4.0/5 "Great!"
      I have my home loan with LIC which was taken 7 years back. The loan amount was 26 lakhs and the interest rate was 10-115 which was bit high than other banks in the market. I had a smooth and easy process here but the processing fee high here. The loan approved on time so I would like to recommend to others.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jan 12, 2018
    • Bank Bazaar Home Loan
      "Application Process is good one and helpful"
      0.5 4.5/5 "Excellent!"
      It was a good experience from the bank bazaar side they had taken very simple steps with respect to loan. So the information available on bank bazaar.com is very much helpful.It is very easy to get the home loan through bank bazar. HDFC bank officials are very much responsible and they respond very well to the customer.
      Was this review helpful? 0
      , allahabad
      Reviewed on Jan 11, 2018
    • HDFC Limited Home Loan
      "Better"
      0.5 4.0/5 "Great!"
      I am having the home loan with the HDFC limited and the rate of interest is good one for me with them. Response is very nice one for me with them and they are very good too. I would like to say that the customer service is very organized with the HDFC limited.
      Was this review helpful? 0
      , jaipur
      Reviewed on Jan 11, 2018
    • Kotak Home Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have taken a home loan from Kotak Mahindra Bank, the loan amount was for Rs 18 lakhs with the rate of interest of 10% which is higher when compared to all other banks. It was overall a good loan experience with this bank. Customer service was good and they provided door step service to collect the documents. I received my loan amount within 10 days. The tenure of the loan is 15 years and i pay an EMI of Rs 20300 for this loan.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jan 11, 2018
    • review Home Loan
      "Home loan with CANFIN HOMES "
      0.5 5.0/5 "Blown Away!"
      I have taken a home loan from CANFIN HOMES LTD. The approved loan amount was 15 lakhs . The given rate of interest was 8.36%. The monthly EMI comes around 20000. the total tenure is for 10 years. there were some processing fees charged by them..
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Jan 10, 2018
    Common Loader Icon
  • reTH65gcmBgCJ7k
    This Page is BLOCKED as it is using Iframes.