KVB Hikes Lending Rates: Does Your EMI Go Up?

Karur Vysya Bank has raised its MCLR — the benchmark rate that decides what interest you pay on loans. If your loan is linked to MCLR, your EMI could quietly go up without any notice from the bank.

Here's what happened: Karur Vysya Bank revised its Marginal Cost of Funds Based Lending Rate (MCLR) upward on select loan tenures.. The revised MCLR at KVB now ranges between 8.75% and 9.35% depending on whether your loan is overnight, 1-month, 3-month, 6-month, or 1-year tenure.. MCLR-linked loans — including home loans, car loans, and personal loans sanctioned before October 2019 — automatically reprice when the bank revises its benchmark rate..

What you should do: Check your loan sanction letter or latest bank statement to confirm whether your loan is MCLR-linked or repo-rate linked (EBLR) — this one detail determines if your EMI changes.. Call your KVB branch or log into net banking to find your loan's reset date — MCLR hikes only hit your EMI on the next reset date, not immediately.. Compare your current effective interest rate against new home loan offers from other lenders — if the gap is 0.50% or more, a balance transfer could save you lakhs over the remaining tenure..

If your KVB loan was taken after October 2019 and is linked to the repo rate (EBLR), this MCLR hike does NOT affect you — only older MCLR-linked borrowers feel this pinch.