Government bank Punjab National Bank has cut MCLR by 5 basis points. This cut will make the interest rates of home loans cheaper. Along with home loans, other loans will also be cheaper.
With a cut of 5 basis points in the Marginal Cost of Funds Based Lending Rate, existing loan holders and loan takers will get loans at lower interest rates. This change has come into effect from July 1, 2025. After the cut in the repo rate by the Reserve Bank of India, many banks have cut their loan interest rates. Recently, Finance Minister Nirmala Sitharaman had said that government banks should give the benefit of the cut in repo rate to the customers.
What is MCLR?
MCLR is the minimum interest rate at which the bank is allowed to lend by law. Under this, banks fix the interest rate on the loan given to customers. We can say that this is a fundamental tool through which banks fix the interest rates of different loans, like home loans, auto loans, and education loans.
PNB's new MCLR?
The new overnight MCLR rate of Punjab National Bank has become 8.20 percent. Earlier, it was 8.25 percent.
For one month, it has been reduced from 8.40 percent to 8.35 percent.
For three months, MCLR has been reduced from 8.60 percent to 8.55 percent.
For six months MCLR has been reduced from 8.80 percent to 8.75 percent.
The year MCLR has been reduced from 8.95 percent to 8.90 percent.
The MCLR has been reduced by Punjab National Bank from 9.25 percent to 9.20 percent.
Is a home and personal loan decided based on one-year MCLR?
The one-year period of MCLR is very important. Because it is the benchmark for the rate of interest of home loans, retail loans, or personal loan.
After the new MCLR of Punjab National Bank, customers taking floating loans will benefit. A floating loan is one whose rate of interest does not change. It keeps increasing and decreasing over time. After the change in MCLR, the EMI of those taking floating home loans may decrease.
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