To Apply and Manage
your Home Loan.
Download our Mobile App
Indiabulls Home Loans
Apply
Online

India's 1st Completely Online Home Loan!

  • e-APPLY

  • e-SANCTION

  • `

    e-DISBURSE

Start your eHome Loans Process Now!

Apply Online
OR

Download our Mobile App

Enter Mobile Number to get app on your phone

+91
GET A
CALL NOW

Fill in the details below

  • Generate OTP

MCLR- A new benchmark for home loan borrowers

MCLR- A new benchmark for home loan borrowers
 

People who are thinking of taking a new home loan or are currently paying back a previous one now have a new benchmark rate to keep track of. The lending rate which is based on the marginal cost of funds (MCLR) is set to replace the current base rate. If opting for a floating rate of home loan, the lending rate will be against the MCLR. While this may be applicable only on loans taken after April 1st, existing borrowers too will be affected. This is due to the fact that the leading banks have set their interest rates based on the MCLR, which is lower than the existing rates. Old borrowers have the choice to move to the new system of interest, however, keep in mind that if you had opted for a floating rate of interest, banks charge an interest with a mark-up on the base rate, also called spread. If the new system is put into effect, banks will add a spread to MCLR and not the base rate to get the loan rate. Banks will now show 5 different MCLR’s ranging from overnight tenures to one year as compared to the single base rate banks declared before. The long term loans provided by banks will be based on the one year MCLR and hence this is the rate which should be monitored. Since the MCLR uses the latest rates offered on deposits for its calculations, the rates will fall more sharply than the base rate. The one year MCLR is 10-30 points lower than the existing base rate. However, MCLR will not result in a lower lending rate automatically from all banks. Some banks do offer deals under the MCLR, which makes their home loans more attractive than the competition. If this new system comes into play, the home loan market will change greatly, making home loans more attractive for people to avail. Related Articles:

The post MCLR- A new benchmark for home loan borrowers appeared first on Indiabulls home loans.

Related Article
Types of Home Loan Charges

Types of Home Loan Charges

Most people fulfil their wish of becoming homeowners by taking out a home loan. It is the easiest way to afford a property as one can pay for the house in monthly instalments.

MCLR in Home Loan

MCLR in Home Loan

The interest rate is one of the most important components of a loan, especially in the case of a high-value loan that lasts for 2 decades or more; the home loan.

Home Loan Terminology

Home Loan Terminology

Each one of us, at some or the other point in life, dreams of becoming a homeowner. Having a house to call our own is the surest way of being financially secure.

Share your comments on the article
0 / 3000
Read all comments

No Comments