PNB Bank MCLR & Base Rate

How to switch from Punjab National Bank Base Rate to Punjab National Bank MCLR Rate?

In order to switch from Punjab National Bank Base Rate to Punjab National Bank MCLR Rate, two steps must be followed:

• A written application must be sent to Punjab National Bank so that they may initiate the linking process for your home loan and MCLR.
• After the linking between the marginal cost of funds based lending rate and PNB Home Loan is done, you must ask the bank to reduce the quantum of spread. You will have to pay a processing fee for the linking. After this the interest rates associated with your home loan will be refreshed as per MCLR.

What Should the Existing Borrowers Do?

Switching to marginal cost of funds based lending rate can reap great benefits. You can save a great deal of interest which you would have paid otherwise with base rate on your housing loan. The existing borrowers, however, will not be able to enjoy the benefits of MCLR right away. Most of the home loan agreements associated with marginal cost of funds based lending rate are borrowed after a year. The existing borrowers of PNB home loan will have to wait till their home loan rates are renewed. The new rate of interest on the date of reset will be determined by MCLR rate cuts over the past half-year or one year.

PNB Home Loan Rate and MCLR:

• The overnight loans, cash credit, etc. are shorter duration loans. They have been linked to the shorter period MCLR. The longer period loans like vehicle loan, housing loan, etc. have been linked to the longer duration marginal cost of funds based lending rates.
• The applicable rate on the floating rate housing loans has two distinct parts. One is the applicable benchmark rate and the other one is the margin or spread on top of benchmark.
• Floating rate housing loans that have been sanctioned by Punjab National Bank is benchmarked to MCLR with specific tenures like 6 months, 1 year, 3 years, etc.

Punjab National Bank MCLR History

• The overnight loans, cash credit, etc. are shorter duration loans. They have been linked to the shorter period MCLR. The longer period loans like vehicle loan, housing loan, etc. have been linked to the longer duration marginal cost of funds based lending rates.
• The applicable rate on the floating rate housing loans has two distinct parts. One is the applicable benchmark rate and the other one is the margin or spread on top of benchmark.
• Floating rate housing loans that have been sanctioned by Punjab National Bank is benchmarked to MCLR with specific tenures like 6 months, 1 year, 3 years, etc.

A good credit score can help you secure lower interest rates on loans and credit cards.

Get Free Credit Score