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EMI can be expensive, after SBI, private sector Axis Bank also made loans expensive

EMI To Be Costly: Many types of loans including home loans, car loans, education loans and personal loans will now become costlier. After the country’s largest state-owned bank State Bank of India, now private sector giant Axis Bank has also announced to make loans expensive. Axis Bank has increased the Marginal Cost of Lending Rate (MCLR) by 5 basis points. This increase has come into effect from 18 April 2022.

How much did MCLR increase?
Axis Bank has increased the overnight and one-month ACLR from 7.10 percent to 7.15 percent, three-month ACLR from 7.20 percent to 7.25 percent with effect from April 18. So the MCLR rate for 6 months has been increased from 7.25 percent to 7.30 percent. The one-year MLCR has been increased from 7.30 percent to 7.35 percent, two-year MCLR from 7.40 percent to 7.45 percent and three-year MCLR from 7.45 percent to 7.50 percent.

More banks can increase MCLR
RBI did not make any change in the repo rate while reviewing the loan policy on 8 April. But banks are making loans expensive. Before Axis Bank, Bank of Baroda has increased MCLR by 5 basis points and SBI by 10 basis points. After the increase in MCLR, the EMI of the existing customers who have taken loans from these banks will become expensive after the loan reset date. RBI had said in its order that all loans taken after April 1, 2016 should be linked to MCLR.

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