I want to take a home loan, and wanted to check if there is any scope of the marginal cost of funds based lending rate (MCLR) coming down?
Normally, the MCLR is fixed for a pre-defined period, which can range from a month to a year
I want to take a home loan, and wanted to check if there is any scope of the marginal cost of funds based lending rate (MCLR) coming down?
Kunal Kohli, Chandigarh
The MCLR has four components: marginal cost of funds (the repo rate and other borrowing rates), negative carry on account of cash reserve ratio (CRR), operating costs and tenor premium. All these factors combined together will determine the MCLR. Normally, the MCLR is fixed for a pre-defined period, which can range from a month to a year. So, once you lock-in an MCLR, your rate gets locked for the determined fixed period and gets reset after the pre-decided interval. MCLR is sensitive to RBI policies and hence can change frequently. What matters to you once you take a loan is to keep track of the rate change development by the RBI to know how it will impact your loan repayment.