Repo rate, EBLR and MCLR: what your loan is linked to
The benchmark decides how quickly a policy rate cut reaches your EMI.
4 min read
What you need to know
Retail floating loans from banks are linked to an external benchmark, almost always the repo rate, and must reset at least once every three months. Older loans may still sit on MCLR, which resets annually and passes on cuts far more slowly.
NBFCs are not required to use an external benchmark and typically price off their own PLR, which is why NBFC rates move less predictably. If you are on MCLR or an NBFC PLR, ask about conversion when the rate cycle turns.
Continue your research
Use this guide alongside our product details and eligibility criteria before choosing a lender.
Frequently asked questions
What is the main takeaway from “Repo rate, EBLR and MCLR: what your loan is linked to”?
The benchmark decides how quickly a policy rate cut reaches your EMI.
What should I check before acting on this loan basics guide?
Review the practical points in the guide against your income, obligations, documents and lender requirements.
Can the information in this guide guarantee loan approval?
No. It is general educational information. A bank or NBFC makes the final decision after checking your credit profile, repayment capacity, documents and the applicable product policy.
How can iFINTRUST help after I read this guide?
An iFINTRUST advisor can review your requirement, explain the documents normally requested and help you compare suitable lending options before you apply.