Punjab National Bank has increased its lending rates by 5 basis points across all tenors, leading to higher interest costs for borrowers.
State-owned Punjab National Bank (PNB) has announced a 5 basis point increase in its Marginal Cost of Funds Based Lending Rate (MCLR) across all tenors, effective from August 1, 2024. This upward adjustment will result in higher interest rates for borrowers on various loan products, including home loans, auto loans, and personal loans.
The benchmark one-year MCLR, commonly used for pricing consumer loans, has been raised to 8.90% from 8.85%. While this might seem like a small increase, it will translate into higher monthly installments for existing borrowers and more expensive loan costs for new applicants. The decision to hike MCLR is in line with the overall tightening monetary policy stance adopted by the Reserve Bank of India. This move aims to curb inflation by making borrowing more expensive, thereby reducing spending and cooling down economic activity.
As a result of this rate hike, borrowers can expect to pay more interest on their loans. It’s advisable for existing borrowers to reassess their loan repayment plans and for prospective borrowers to carefully consider the increased costs before taking on new debt.
