The bank has made the home loan cheaper, the new interest rate will be applicable from November 7

Canara Bank has decided to reduce interest rates on loans based on Marginal Cost Lending Rate (MCLR). A reduction in MCLR will reduce interest rates on all term loans. The bank's rate cut decision is effective from November 7. Interest rates on one-day, one-month and three-month loans have been reduced by 15 basis points. Interest rates on 6-month and one-year loans have been reduced by 5 basis points. The repo rate has been kept unchanged at the linked lending rate i.e. RLLR 6.90%.

Consumers will directly benefit from the reduction in MCLR based lending rates. This decision will make all types of loans including car loans, home loans, personal loans cheaper. Existing loan holders will also benefit from this. Their EMI will be lower.

The MCLR loan will be a term based internal benchmark. This literally means that the bank cannot give a loan to any customer below MCLR for a certain period of time. Apart from this there is also a repo rate attached to the RLLR. In this, the interest rate of the loan is linked to the repo rate of the Reserve Bank. Consumers will benefit from the rate cut if there is a cut. If the repo rate goes up, the interest rate on the loan will also go up.