If your home or personal loan is on a floating rate (a rate that can change over time, unlike a fixed rate), costs are quietly creeping up again.
Canara Bank raised its MCLR — the internal rate banks use to decide your loan's interest — by 0.05% for shorter tenures. On a ₹40 lakh home loan, even a small MCLR hike can add ₹200–400 to your monthly EMI once your reset date hits.
This is a good time to check which rate your loan is actually on.
What this means for you
- If your loan says "MCLR-linked" in the paperwork, your EMI could rise on your next reset date — typically every 6–12 months.
- Loans linked to RBI's repo rate — the Reserve Bank of India's key interest rate that sets the floor for all bank lending — are not affected by this. These loans are labelled EBLR or RLLR on your statement, and your EMI stays put for now.
- A 0.05% hike on a ₹50 lakh, 20-year loan adds roughly ₹150–300/month — small, but worth knowing.
What you can do
- Check your loan agreement or last bank statement — look for the word "MCLR". If it's there, call your bank and ask about switching to a repo-linked rate (labelled EBLR or RLLR), which won't be affected by moves like this.
- If you have a small lump sum sitting idle — say ₹50,000–1 lakh — a partial prepayment right now reduces the outstanding amount before your next reset date kicks in.
You don't need to worry — but knowing which rate your loan is on could save you real money this year.
Grow with clarity 🌱