‎MCLR‬ (marginal cost of fund-based lending rates) is the new benchmark ‪lending rate‬ at which the borrowers will be given loan from now on. Marginal means ‘additional’. While calculating the lending rates, banks have to consider the additional or changed cost conditions, which will affect the MCLR at which a loan will be given.
So, if you plan to take a ‪home loan‬ at a floating rate, it will now be linked to MCLR. It is advisable to go through the reset clause at the pre-specified interval of the floating home-loan rate agreement. This means if the bank has set a six-month frequency for home-loan interest rate, the rate will be reset every six months, in case of a change in MCLR. Watch this video to understand the concept of MCLR and how it affects you.

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