Consumer loans to become costlier as nationalized bank hikes interest rates

Mumbai: The Equated Monthly Installments (EMIs) of consumer loans will become costlier as State Bank of India has raised the marginal cost of funds-based lending rate (MCLR) by 15 basis points across tenors. The new rates come into effect from November 15, 2022.

The benchmark one-year MCLR, which is used as base for fixing most of home, auto and personal loans, has been raised by 10 basis points (bps) to 8.05. The two-year and three-year MCLRs have been raised by 10 basis points each to 8.25% and 8.35%, respectively. One-month and three-month MCLRs have been increased by 15 basis points each to 7.75%. The six-month MCLR is up by 15 basis points at 8.05% while the overnight rate is higher by 10 basis points at 7.60%.

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MCLR is the minimum rate of interest banks are allowed to give out loans to its customers. It is a benchmark interest rate and it dictates the lower limit of the interest rate for a loan.