HDFC Bank Loan: While announcing the monetary policy, the Reserve Bank of India has kept the repo rate at 6.5 percent. Meanwhile, the country’s largest private bank HDFC has given a big shock to the customers. The bank has increased its interest rates. The bank has increased its Marginal Cost of Lending Rates i.e. MCLR. Since then, all bank loans including home loan, car loan, personal loan have become expensive. According to the information available on the bank’s website, HDFC has increased MCLR by 10 basis points i.e. 0.10 percent. Due to this, the EMI amount has also increased from today. The new rates have been implemented by the bank from February 8. Now HDFC Bank’s MCLR is between 8.90 percent to 9.35 percent.
how much has changed
After HDFC made changes in MCLR, the margin cost for overnight loans has increased from 8.80 to 8.90 percent. Whereas, interest on loan taken for one month MCLR has increased from 8.85 percent to 8.90 percent. Earlier the bank used to charge MCLR of 9 percent on three months loan, now it charges 9.10 percent. Along with this, the bank has increased the MCLR on six months loan to 9.30 percent. At the same time, on taking loan for one year, MCLR has increased from 9.25 percent to 9.30 percent. However, the bank has not made any change in the MCLR on its three-year loan. It remains 9.35 percent as before.
What will be the effect on you?
Loan EMI will increase
By increasing HDFC’s MCLR, the interest rate on loans will increase. This means that the loan borrowers will have to pay more EMI. Monthly installment will increase.
Taking a new loan will also be expensive
Taking loan from bank will be expensive. Besides this, it will also be difficult. Its impact will be greatest on those who have a bad credit score or low income.
Negative impact on household expenditure
Increase in MCLR increases the cost of loan, due to which people have less money to spend. This may reduce household expenses. This may slow down economic growth.
Government will benefit
Increasing the MCLR of HDFC will increase the tax revenue of the government. This means that more money will come into the government treasury and there will be more money to spend on public services.
What will be MCLR?
Marginal Cost of Landing (Marginal Cost of Lending) is a kind of interest rate which a bank or financial institution evaluates in its lending process to meet the highest expected transactions. Simply put, an interest rate below which the bank does not give you a loan. To achieve Marginal Cost of Landing, the bank or financial institution has to raise capital from different sources to provide capital for its transactions. These sources may include deposits, market borrowings, repo borrowings, borrowings from financial institutions etc. Furthermore, Marginal Cost of Landing is an important measure used by Central Banks in determining monetary policy. It is considered important to understand the interest rates as per the transaction requirement and monetary policy of the bank.