MCLR

MCLR (Marginal Cost of Funds based Lending Rate) is the internal benchmark banks used to price floating-rate loans before EBLR replaced it. The external benchmark system took over for new retail loans in October 2019. Because a bank computed MCLR from its own cost of funds, rate cuts reached borrowers slowly and unevenly — the transparency problem EBLR was created to fix. Loans still on MCLR reset only on their own reset date, typically every six or twelve months. If your home loan sits on MCLR, ask your lender what switching to a repo-linked rate would cost.