If you are planning to borrow funds to buy a home, expand your business or to meet any other financial needs, seal the deal right now.
Cost of loans including Home Loan, Personal Loan, etc. is on a surge right now. Axis Bank has already raised its benchmark MCLR (marginal cost of funds based lending rate) by 10 bps (basis points) in the three months (w.e.f February 17).
*1 basis point = 0.01 percentage point
Bank’s three months MCLR is 8.15% now and six months MCLR is 8.30% while its one year rate is 8.40%. This is for the second time that Axis bank has increased its lending rates in last two months. Earlier, it hiked the MCLR by 5 bps in January.
Higher MCLR indicates the hike in bank deposit rates as liquidity of banking sector has dried up in the last couple of months. MCLR is linked to the cost that banks pay on their deposit.
RBI (Reserve Bank of India) is going to link the base rates of banks with MCLR system to ensure that the changes in the policy rates can effectively reflect on all bank loans.
RBI declared in its recent monetary policy review that all base rates are going to be linked to MCLR w.e.f. April 1, 2018.
The new MCLR regime that was implemented in the financial year 2016 is linked to bank deposits rates and applies to all new borrowers. Hence, all new floating interest rate loans are linked to MCLR now.
With so much going on in the lending sector, interest rates on loans are only going to increase from now onwards. If you have been delaying your important plans due to money constraints, it’s time to avail a loan. For example, if you are thinking of Buying a Home with a Home Loan, do it right now. Even if you have an existing Home Loan which was purchased some years ago at higher interest rate, you can opt for Home Loan Balance Transfer at this moment.
Make the most of present interest rate regime before it gets too late!