MCLR Revised: How Much More Is Your EMI?

Bank of Baroda and Canara Bank have revised their MCLR rates from June 12. If your home loan, car loan, or personal loan is linked to MCLR, your EMI amount could go up or down depending on your reset date.

Here's what happened: Bank of Baroda and Canara Bank revised their Marginal Cost of Funds-based Lending Rates across multiple tenors effective June 12, 2025.. MCLR is the internal benchmark used by banks to price floating-rate loans — any revision directly impacts borrowers on MCLR-linked products.. Millions of older home loans, vehicle loans, and SME loans in India are still pegged to MCLR rather than the newer external benchmark like the repo rate..

What you should do: Check your loan sanction letter or latest statement to confirm whether your loan is linked to MCLR or an external benchmark like repo rate.. Find out your loan's 'reset date' — the specific date each year when your lender applies the revised MCLR to your outstanding loan balance.. If your MCLR-linked loan is costing you more, ask your bank about switching to a repo-linked loan — the conversion fee (usually ₹2,000–₹5,000) often pays back quickly..

Banks must reset your MCLR-linked EMI only on your reset anniversary date — not immediately. So a June 12 MCLR revision won't hit your EMI until your next reset cycle.