Canara Bank has decided to increase the interest rates it charges on some loans. The bank will raise its MCLR (Marginal Cost of Funds Based Lending Rate) by 10 basis points (0.10%) for loans with a two-year and three-year period starting from Thursday. Because of this, loans such as home loans, personal loans, and business loans may become slightly more expensive.
The bank has increased its lending rates for longer periods.
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2-year MCLR: The rate has increased from 8.85% to 8.95%. This means loans that are linked to the 2-year MCLR will now have a 0.10% higher interest rate.
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3-year MCLR: The rate has increased from 8.90% to 9.00%. This also means a 0.10% increase in interest rate for loans linked to the 3-year MCLR.
For customers this means:
- If your loan is linked to MCLR, your EMI may increase slightly when the loan rate resets.
- New borrowers may also get loans at a slightly higher interest rate.
Since about half of the bank’s loans are linked to MCLR, this increase could make some loans slightly more expensive for borrowers. The bank’s total loan book was about ₹11.92 lakh crore at the end of December.
