Home loans, auto loans and other loans from State Bank of India, the country's largest bank, have become more expensive. State Bank of India (SBI) has hiked interest rates on all term loans at marginal cost of lending rate (MCLR). SBI has increased the interest rates by 0.10 per cent. According to the bank's website, the MCLR will be increased from April 15.
The bank has increased its one-day, one-month and three-month MCLR from 6.65 per cent to 6.75 per cent. So, in the six-month MCLR, it has gone up from 6.95 per cent to 7.05. The country's largest lender has increased its MCLR from 7 per cent to 7.10 per cent for one year. So, the rate has been increased from 7.20 per cent to 7.30 per cent for two-year MCLR and 7.40 per cent for three years.
Meanwhile, Bank of Baroda has also increased the MCLR for all term loans by 0.05 per cent. The new rates came into effect on April 12. The MCLR rate has been fixed at 7.35 per cent for a period of one year. The MCLR for the one-day, one-month, three-month and six-month periods was increased by 6.50 per cent, 6.95 per cent, 7.10 per cent and 7.20 per cent, respectively.
What is MCLR?
MCLRis a tenor-linked internal benchmark, which means the rate is determined internally by the bank depending on the period left for the repayment of a loan. The RBI introduced the MCLR methodology for fixing interest rates from 1 April 2016