Government-owned Union Bank of India has increased its Marginal Costs of Funds-Based Lending Rates (MCLR), which would make the loans from the bank more expensive. As per a UBI notification, the new rates have already become effective From December 11. The MCLR is the base rate adopted by banks that acts as a key point in deciding various loan rates.
Union Bank of India has raised its MCLR interest rates by 5 basis points across the board. The MCLR benchmark ranges anywhere between 7.50 percent and 8.60 percent. The interest rates will remain unchanged until January 10, 2023. In addition, the bank revised its external benchmark lending rates, which are linked to the repo rate.
The website states that as of December 11, the 3-year MCLR rate is 8.60 per cent, while the rates for the 2-year and 1-year tenures will be 8.45 per cent and 8.25 per cent, respectively. The lender is providing an 8.05 per cent MCLR for six months, 7.85 per cent for three months, 7.65 per cent for one month, and 7.50 per cent for overnight tenure. The External Benchmark Lending Rate (EBLR) has been set at 9.05 per cent as of December 11, which is a total of a repo rate of 6.25 per cent plus a spread of 2.80. As a result, the lender’s home loan interest rates have changed. Furthermore, CIBIL score will influence the amount of EMIs one pays on their home loans. The interest rate on a home loan will be lower when an individual’s credit score is high.
In terms of home loans, Union Bank stated that the approved interest rate will be effective for all new Union Home and Union Awas loan customers (including switchover from other Benchmarks, namely MCLR / Base Rate / BPLR to EBLR).
According to the Economic Times, the Reserve Bank of India (RBI) raised its repo rate by 35 basis points to 6.25 per cent in its monetary policy announcement on December 7, causing numerous banks to raise home loan interest rates in the following days.
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