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Your Money: Customers on base rate should shift to MCLR

Though banks charge 0.5% of the outstanding amount, it makes sense to shift, given fall in rates

Tinesh Bhasin  |  Mumbai 

With State Bank of India (SBI) and other public and private sector banks cutting interest rates by 50-90 basis points (bps) sharply on Sunday and Monday, it would be a good time for home loan borrowers who are still on base rate, to shift to rates based on the Marginal Cost of fund-based Lending Rate (MCLR).  Reason: while SBI has cut 50 bps for customers who are on MCLR, customers on base rate will get a benefit of only 5 bps. In fact, customers who have borrowed recently (less than a year ago), will have to wait to for a whole year to avail of the benefit of the rate cut. ...

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First Published: Tue, January 03 2017. 00:56 IST
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