Banks Raise Interest Rates On Some Loans

New Delhi: Interest rates on some retail loans, excluding home loans, have started inching up, with several banks revising their marginal cost of lending rate (MCLR). Although banks have linked their home loans to the repo rate (the rate at which the Reserve Bank of India lends), which has stayed the same since February 2023, many other loans are not linked to the repo rate, Times of India reported.

SBI

It offered auto loans beginning at 8.65% until December. Now, it has hiked the starting rate to 8.85% for clients with high credit scores.

Bank of Baroda

It was charging 8.7% on auto loans last month. Now, is charging 8.8% and has reintroduced its processing fees, which were waived during the festival months.

Union Bank of India

It has hiked rates on auto loans and some of its personal loans by revising the spread over the external benchmark. The public sector lender now has car loans starting at 9.15% as against 8.75% earlier.

IDFC First Bank

It has increased interest rates on personal loan from 10.49% in November to 10.75%.

Karnataka Bank

It has hiked personal loan rates from 14.21% to 14.28% during the same time-period.

A bank executive told TOI that the lenders were waiting for the festival season to get over to revise rates. There has been an increase in the cost of funds due to revision in deposit rates coupled with the tightness in the money markets.