Bank Loan Rate Reduced: Good news for loan takers! Bank of Baroda reduced interest rates, check new rates

Bank of Baroda MCLR update Bank of Baroda has reduced the Marginal Cost of Funds Based Lending Rate. The new revised rates have come into effect from June 12. This will also affect the interest rate charged on home loans. Home loan borrowers are going to benefit greatly from this.

Bank Loan Rate Reduced: Bank of Baroda, one of India’s leading public sector banks, announced a cut in its Marginal Cost of Funds Based Lending Rate (Bank of Baroda MCLR update) from June 12, 2025. The new rates will be applicable on both new and old loans linked to MCLR. The new revised rates have come into effect from Thursday, June 12. Bank of Maharashtra has also cut its interest rates on home, car, education and retail loans linked to repo linked lending rate by up to 50 basis points.

Last week, the Reserve Bank of India (RBI) cut the repo rate by 50 basis points more than expected. Not only this, the central bank also reduced the Cash Reserve Ratio for banks by 1 percent. Due to the reduction in repo rate, most banks have revised their interest rates.

The six-member Monetary Policy Committee of RBI reduced the repo rate by 50 basis points to 5.5%. Also, CRR was reduced by 100 basis points to 3%, adding another Rs 2.5 lakh crore to the excess liquidity already in the banking system.

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BOB cuts MCLR by 5 basis points

The bank has reduced MCLR by 5 basis points for one month to one year tenures.

  • Overnight MCLR remains unchanged at 8.15%.
  • One-month MCLR revised to 8.30% from 8.35%.
  • Three-month MCLR revised to 8.50% from 8.55%.
  • Six-month MCLR revised to 8.75% from 8.80%.
  • One-year MCLR revised to 8.90% from 8.95%.

How does the increase or decrease in MCLR affect home loans?

Revision in the Marginal Cost of Funds Based Lending Rate can benefit those taking loans linked to MCLR. People associated with this may be eligible for lower interest rates on home loans, personal loans, business loans.

The bank’s Marginal Cost of Funds Based Lending Rate (MCLR rate cut June 2025) directly affects the interest rate on your home loan. Especially if it is a floating-rate loan. A decrease in MCLR leads to a potential reduction in loan EMI. On the other hand, if it increases, the EMI increases. The interest rate on home loans is generally calculated by adding spread or margin to the MCLR. Therefore, it affects the home loan.

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