BOB & Canara Cut MCLR: Will Your EMI Drop?

Bank of Baroda and Canara Bank have revised their MCLR rates across tenors from June 12. If your home, car, or personal loan is linked to MCLR, your EMI may change at the next reset date — but only if your bank passes on the cut.

Here's what happened: Bank of Baroda and Canara Bank revised their Marginal Cost of Funds-based Lending Rates (MCLR) across multiple tenors effective June 12, 2025.. MCLR is the internal benchmark rate public sector banks use to price floating-rate loans like home loans, car loans, and business loans.. This revision follows the RBI's recent repo rate cut cycle, as banks gradually adjust their cost of funds and pass on some benefit to borrowers..

What you should do: Check your loan sanction letter or latest bank statement to confirm whether your loan is linked to MCLR or an external benchmark like the repo rate.. Call your bank or log in to net banking to find your loan's next reset date — MCLR-linked EMIs only change at the reset interval, not immediately.. Compare your current effective interest rate with fresh loan offers online — if the gap is large, consider requesting a rate reset or switching lenders..

MCLR cuts don't apply instantly — your EMI changes only on your loan's reset date (monthly, quarterly, or annual). Mark that date in your calendar to follow up with your bank.