IDFC First Bank MCLR Rate Hike: Since the decision of the Reserve Bank of India to increase the repo rate, all the banks are continuously increasing the interest rates of their loans. Apart from this, banks are also increasing the interest rates of fixed deposit schemes and savings bank accounts. In such a situation, all these are directly affecting the customers. Recently, the country’s largest private sector bank IDFC First Bank has decided to increase the Marginal Cost of Funds Based Lending Rate (MCLR). The increased MCLR rates of the bank will be applicable from July 8, 2022.
MCLR rates vary for different tenures. For three months it is 7.95%. Whereas the MCLR rate of 1-year IDFC First Bank is 8.80%. Whereas for 6 months this rate is 8.50%.
Salaried person will get 7.5% interest rate
The bank is charging 10.49% interest rate on personal loans. This is the lowest interest rate of personal loan. The maximum interest rate you will have to pay on a personal loan is 25%. On the other hand, if you are a salaried person, then IDFC First Bank is charging 7.50% interest rate.
Why loan becomes costly due to increase in MCLR?
Any bank fixes its interest rates on the basis of marginal cost of funds based lending rate. The EMI of the customers is fixed only when the MCLR increases and decreases. With the change in the Reserve Bank’s Repo Rate, banks change their MCLR rates. If the bank’s MCLR is high, then customers will have to pay a higher interest rate and if the MCLR is lower, EMI will have to be paid on the basis of a lower interest rate.