Bank of Baroda gave a blow, increase in loan interest, know from when it will be applicable

Bank Of Baroda Loan Costly: Private sector Bank of Baroda has increased the interest rate of loans linked to the Marginal Cost of Funds Based Lending Rate (MCLR) after the central bank increased the repo rate by 0.25 percent. The increased rates of the bank will be applicable from 12 February 2023 and the new interest will be updated on the official website of the private bank.

How much has the loan interest rate increased

The Marginal Cost of Funds Based Lending Rate (MCLR) has been increased by 5 basis points. This increase has been done for all tenures. The bank said in a filing that the overnight MCLR rate has been increased by 5 bps to 7.90 percent from 7.85 percent, while the one-month tenure has been increased by 5 bps to 8.20 percent. Three-month MCLR has been increased from 8.25 percent to 8.30 percent, 8.40 percent for six months, 8.55 percent MCLR for one year.

What will be the effect of increase in MCLR

The increase in MCLR will affect corporate borrowers. Retail lending, which includes housing, personal loans and SMEs, will also see an increase in interest. Especially loans linked to external benchmarks will be affected. With the increase in interest, the EMI will also increase.

The Reserve Bank had increased the repo rate for the sixth time.

The central bank had increased the repo rate for the sixth time in the country. The bank had increased the repo rate by 0.25 percent. Now the repo rate of RBI has become 6.50 percent. This means that now on this interest, RBI will provide loan to the banks. In such a situation, there is a possibility that all the banks will increase the interest of their loans, which will have a direct impact on the banks taking loans.

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