{"id":10063,"date":"2026-07-25T10:46:56","date_gmt":"2026-07-25T05:16:56","guid":{"rendered":"https:\/\/www.fatakpay.com\/blog\/?p=10063"},"modified":"2026-07-25T10:46:57","modified_gmt":"2026-07-25T05:16:57","slug":"what-is-mclr","status":"publish","type":"post","link":"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-mclr\/","title":{"rendered":"What is MCLR? Meaning, Full Form &#038; How It Affects Your Personal Loan Rate\u00a0"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">MCLR is an internal benchmark that banks use to&nbsp;determine&nbsp;the interest rate on certain floating-rate loans. Understanding&nbsp;what MCLR is&nbsp;can help you see why borrowing costs differ between banks and why the interest rate on some loans changes over time.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Although MCLR&nbsp;remains&nbsp;relevant for many existing bank loans, most new floating-rate retail loans from banks now follow an external benchmark such as the Repo-Linked Lending Rate (RLLR). It is also important to note that MCLR does not apply to loans offered by NBFCs.&nbsp;<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-mclr\/#MCLR_full_form_and_meaning\" >MCLR full form and meaning&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-mclr\/#How_is_MCLR_calculated\" >How is MCLR calculated?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-mclr\/#How_MCLR_affects_your_loan_interest_rate\" >How MCLR affects your loan interest rate&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-mclr\/#Types_of_MCLR_by_tenure\" >Types of MCLR by tenure&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-mclr\/#MCLR_vs_Repo-Linked_Lending_Rate_RLLR_what_changed_in_2019\" >MCLR vs Repo-Linked Lending Rate (RLLR): what changed in 2019&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-mclr\/#Does_MCLR_apply_to_FatakPay_personal_loans\" >Does MCLR apply to&nbsp;FatakPay&nbsp;personal loans?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-mclr\/#MCLR_vs_base_rate\" >MCLR vs base rate&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-mclr\/#Get_a_Personal_Loan_with_Transparent_Interest_Rates\" >Get a Personal Loan with Transparent Interest Rates&nbsp;&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-mclr\/#Conclusion\" >Conclusion&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-mclr\/#FAQs\" >FAQs&nbsp;<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-mclr\/#How_often_does_MCLR_change\" >How often does MCLR change?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-mclr\/#Does_MCLR_apply_to_personal_loans_from_NBFCs_like_FatakPay\" >Does MCLR apply&nbsp;to&nbsp;personal loans from NBFCs like&nbsp;FatakPay?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-mclr\/#What_replaced_the_MCLR_system_for_retail_loans_in_2019\" >What replaced the MCLR system for retail loans in 2019?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-mclr\/#Is_a_lower_MCLR_always_better_for_borrowers\" >Is a lower MCLR always better for borrowers?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-mclr\/#What_is_the_difference_between_MCLR_and_repo_rate\" >What is the difference between MCLR and repo rate?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-mclr\/#Can_my_MCLR-linked_loan_rate_increase_during_the_tenure\" >Can my MCLR-linked loan rate increase during the tenure?&nbsp;<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"MCLR_full_form_and_meaning\"><\/span><strong>MCLR full form and meaning<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The&nbsp;full form of MCLR&nbsp;is&nbsp;Marginal&nbsp;Cost of Funds-based Lending Rate. The Reserve Bank of India (RBI) introduced the MCLR framework in April 2016 to replace the Base Rate system and improve the transmission of changes in policy rates to borrowers.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you are wondering&nbsp;what the MCLR rate is, it is&nbsp;the internal benchmark lending rate that banks use to price eligible floating-rate loans. Banks add a spread based on factors such as the borrower&#8217;s credit profile, loan&nbsp;amount&nbsp;and repayment tenure to arrive at the final lending rate.&nbsp;&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In simple terms, MCLR refers to a bank&#8217;s lending benchmark that reflects the cost of raising fresh funds. This is why MCLR differs from one bank to another and can change as funding costs change&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_is_MCLR_calculated\"><\/span><strong>How is MCLR calculated?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Banks calculate MCLR using four key components: the marginal cost of funds, the negative&nbsp;carry on&nbsp;account of the Cash Reserve Ratio (CRR), operating&nbsp;costs&nbsp;and a tenor premium for longer-duration loans. Since funding costs change over time, banks review and publish their MCLR for different tenures every month.&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_MCLR_affects_your_loan_interest_rate\"><\/span><strong>How MCLR affects your loan interest rate<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The interest rate on an MCLR-linked loan is reviewed only on the reset date mentioned in your loan agreement, which is commonly every six or twelve months. Until that reset date arrives, changes in the published MCLR usually do not affect your existing interest rate.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For example, if a bank&#8217;s one-year MCLR stands at 8.75%, and it adds a spread of 0.50% for a particular borrower, the effective lending rate works out to 9.25%. This rate does not stay fixed for the entire loan tenure. It resets at intervals defined in your loan agreement, known as the&nbsp;loan&nbsp;reset date, which is usually every six or twelve months.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Types_of_MCLR_by_tenure\"><\/span><strong>Types of MCLR by tenure<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Banks publish several&nbsp;types of MCLR rates, one for each tenure, and the one applied to your loan depends on the reset period your lender uses.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Tenure<\/strong>&nbsp;<\/td><td><strong>Typically used for<\/strong>&nbsp;<\/td><\/tr><tr><td>Overnight MCLR&nbsp;<\/td><td>Very short-term loans where applicable&nbsp;&nbsp;<\/td><\/tr><tr><td>One-month MCLR&nbsp;<\/td><td>Short-term working capital loans&nbsp;<\/td><\/tr><tr><td>Three-month MCLR&nbsp;<\/td><td>Working capital loans and some retail loans&nbsp;<\/td><\/tr><tr><td>Six-month MCLR&nbsp;<\/td><td>Common reset benchmark for older home loans&nbsp;<\/td><\/tr><tr><td>One-year MCLR&nbsp;<\/td><td>Most widely used benchmark for retail loans before RLLR&nbsp;<\/td><\/tr><tr><td>Above one year&nbsp;<\/td><td>Long-tenure corporate loans&nbsp;<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"MCLR_vs_Repo-Linked_Lending_Rate_RLLR_what_changed_in_2019\"><\/span><strong>MCLR vs Repo-Linked Lending Rate (RLLR): what changed in 2019<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">From 1 October 2019, the RBI required banks to link new floating-rate retail loans, including home and personal loans, to an external benchmark instead of MCLR. The Repo-Linked Lending Rate (RLLR), which is&nbsp;directly linked&nbsp;to the RBI&#8217;s repo rate, became the most widely adopted benchmark.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This change was introduced to improve the transmission of RBI policy rate changes to borrowers. Unlike MCLR, which depends on each bank&#8217;s internal funding costs, RLLR tracks changes in the repo rate, allowing interest rate revisions to reflect monetary policy more quickly.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To understand how RBI policy decisions influence borrowing costs, you can also read our guide on the&nbsp;impact of the repo rate on personal loans.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Does_MCLR_apply_to_FatakPay_personal_loans\"><\/span><strong>Does MCLR apply to&nbsp;FatakPay&nbsp;personal loans?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">MCLR is a bank-specific benchmark defined under the RBI&#8217;s regulatory framework for banks, and it does not extend to non-banking financial companies (NBFCs).&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">FatakPay, as an NBFC, follows its own NBFC lending rate structure rather than a monthly-reviewed banking benchmark like MCLR or RLLR. Your\u00a0personal loan interest rate\u00a0through\u00a0FatakPay\u00a0is\u00a0determined\u00a0by risk-based pricing, considering factors like your credit profile, income\u00a0stability\u00a0and repayment history, rather than a bank&#8217;s cost of funds calculation.\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"MCLR_vs_base_rate\"><\/span><strong>MCLR vs base rate<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Before MCLR existed, banks priced loans using the base rate system, and the two work quite differently, like:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Base rate relied on the average cost of funds, while MCLR uses the marginal, or\u00a0incremental,\u00a0cost of the latest funds raised.\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Base rate revisions were less frequent and less responsive to RBI rate cuts, while MCLR is reviewed monthly.\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>MCLR includes a tenor premium tied to loan duration, a feature that the base rate did not factor in.\u00a0<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Base rate has been phased out for most new loans since April 2016, though some older loans may still reference it.\u00a0<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Get_a_Personal_Loan_with_Transparent_Interest_Rates\"><\/span><strong>Get a Personal Loan with Transparent Interest Rates&nbsp;<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Understanding MCLR is useful when comparing floating-rate loans offered by banks. If you are considering a personal loan from an NBFC, review&nbsp;the&nbsp;personal loan interest rates and charges, estimate your repayments using the personal loan EMI calculator, and compare the overall loan terms before applying.&nbsp;FatakPay&nbsp;offers eligible borrowers&nbsp;<a href=\"https:\/\/www.fatakpay.com\/personal-loan\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>personal loans<\/strong><\/a>&nbsp;of up to \u20b95 lakh through a fully digital application process with transparent terms.&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Understanding&nbsp;MCLR<strong>&nbsp;<\/strong>can help you make better sense of how banks decide interest rates on certain loans. However, it is equally important to remember that not every lender follows this system. Personal loans from NBFCs are priced using their own lending policies and borrower assessment, so changes in MCLR do not directly affect them.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Before applying for any personal loan, compare the final interest rate, EMI, repayment&nbsp;tenure&nbsp;and other charges instead of focusing only on the benchmark used.&nbsp;If you are looking to reduce your borrowing costs on an existing loan, it is also worth understanding&nbsp;loan restructuring vs refinancing&nbsp;before making a decision.&nbsp;A quick check with&nbsp;FatakPay&#8217;s&nbsp;<a href=\"https:\/\/www.fatakpay.com\/calculator\/personal-loan-emi-calculator\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>personal loan EMI calculator<\/strong><\/a>&nbsp;can also give you a clearer idea of what your monthly repayments may look like before you borrow.&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs\"><\/span><strong>FAQs<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_often_does_MCLR_change\"><\/span><strong>How often does MCLR change?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Banks review and publish MCLR figures every month for each tenure, though the rate applied to your existing loan only resets on your specific loan reset date, typically every six or twelve months, not every time the published MCLR changes.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Does_MCLR_apply_to_personal_loans_from_NBFCs_like_FatakPay\"><\/span><strong>Does MCLR apply&nbsp;to&nbsp;personal loans from NBFCs like&nbsp;FatakPay?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">No. MCLR is a regulatory requirement for banks only. Personal loans from NBFCs, including&nbsp;FatakPay, are priced using the lender&#8217;s own risk-based model rather than a bank benchmark.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_replaced_the_MCLR_system_for_retail_loans_in_2019\"><\/span><strong>What replaced the MCLR system for retail loans in 2019?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The RBI mandated external benchmark-linked lending rates, most commonly the Repo-Linked Lending Rate (RLLR), for all new floating-rate retail loans from banks effective 1 October 2019, replacing MCLR as the default benchmark for these loans.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_a_lower_MCLR_always_better_for_borrowers\"><\/span><strong>Is a lower MCLR always better for borrowers?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Not necessarily. A lower MCLR&nbsp;generally means&nbsp;a lower starting interest rate, but the spread a bank&nbsp;adds on&nbsp;top, along with your loan reset date and tenure, also affects your final EMI, so comparing the full rate structure matters more than the MCLR figure alone.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_difference_between_MCLR_and_repo_rate\"><\/span><strong>What is the difference between MCLR and repo rate?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">MCLR is an internal, bank-calculated benchmark based on funding costs and operating expenses, while the repo rate is the rate at which the RBI lends to commercial banks, set through RBI monetary policy decisions. RLLR-linked loans track the repo rate directly, while MCLR-linked loans respond to it indirectly and with a lag.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Can_my_MCLR-linked_loan_rate_increase_during_the_tenure\"><\/span><strong>Can my MCLR-linked loan rate increase during the tenure?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Yes. If your bank&#8217;s MCLR rises before your loan reset date, your interest rate and EMI can increase once the reset takes effect, since MCLR-linked loans are variable by design rather than fixed for the full tenure.&nbsp;<\/p>\n\n\n\n<script type=\"application\/ld+json\"> \n\n{ \n\n  \"@context\": \"https:\/\/schema.org\/\", \n\n  \"@type\": \"BreadcrumbList\", \n\n  \"itemListElement\": [{ \n\n    \"@type\": \"ListItem\", \n\n    \"position\": 1, \n\n    \"name\": \"Home\", \n\n    \"item\": \"https:\/\/www.fatakpay.com\" \n\n  },{ \n\n    \"@type\": \"ListItem\", \n\n    \"position\": 2, \n\n    \"name\": \"Blog\", \n\n    \"item\": \"https:\/\/www.fatakpay.com\/blog\/\" \n\n  },{ \n\n    \"@type\": \"ListItem\", \n\n    \"position\": 3, \n\n    \"name\": \"Personal Loan\", \n\n    \"item\": \"https:\/\/www.fatakpay.com\/blog\/personal-loan\/\" \n\n  },{ \n\n    \"@type\": \"ListItem\", \n\n    \"position\": 4, \n\n    \"name\": \"What Is MCLR\", \n\n    \"item\": \"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-mclr\/\" \n\n  }] \n\n} \n\n<\/script> \n\n\n\n<script type=\"application\/ld+json\"> \n\n{ \n\n  \"@context\": \"https:\/\/schema.org\", \n\n  \"@type\": \"BlogPosting\", \n\n  \"mainEntityOfPage\": { \n\n    \"@type\": \"WebPage\", \n\n    \"@id\": \"https:\/\/www.fatakpay.com\/blog\/personal-loan\/what-is-mclr\/\" \n\n  }, \n\n  \"headline\": \"What Is MCLR? Meaning, Full Form & Rate\", \n\n  \"description\": \"Learn what MCLR means, its full form, how banks calculate it, and how it affects your loan interest rate. Understand MCLR vs RLLR and base rate.\", \n\n  \"image\": \"https:\/\/www.fatakpay.com\/navbar-assest\/Logo-2.png\", \n\n  \"author\": { \n\n    \"@type\": \"Organization\", \n\n    \"name\": \"FatakPay\", \n\n    \"url\": \"https:\/\/www.fatakpay.com\" \n\n  }, \n\n  \"publisher\": { \n\n    \"@type\": \"Organization\", \n\n    \"name\": \"FatakPay\", \n\n    \"logo\": { \n\n      \"@type\": \"ImageObject\", \n\n      \"url\": \"https:\/\/www.fatakpay.com\/navbar-assest\/Logo-2.png\" \n\n    } \n\n  }, \n\n  \"datePublished\": \"2026-07-25\", \n\n  \"dateModified\": \"2026-07-25\" \n\n} \n\n<\/script> \n\n\n\n<script type=\"application\/ld+json\"> \n\n{ \n\n  \"@context\": \"https:\/\/schema.org\", \n\n  \"@type\": \"FAQPage\", \n\n  \"mainEntity\": [{ \n\n    \"@type\": \"Question\", \n\n    \"name\": \"How often does MCLR change?\", \n\n    \"acceptedAnswer\": { \n\n      \"@type\": \"Answer\", \n\n      \"text\": \"Banks review and publish MCLR figures every month for each tenure, though the rate applied to your existing loan only resets on your specific loan reset date, typically every six or twelve months, not every time the published MCLR changes.\" \n\n    } \n\n  },{ \n\n    \"@type\": \"Question\", \n\n    \"name\": \"Does MCLR apply to personal loans from NBFCs like FatakPay?\", \n\n    \"acceptedAnswer\": { \n\n      \"@type\": \"Answer\", \n\n      \"text\": \"No. MCLR is a regulatory requirement for banks only. Personal loans from NBFCs, including FatakPay, are priced using the lender's own risk-based model rather than a bank benchmark.\" \n\n    } \n\n  },{ \n\n    \"@type\": \"Question\", \n\n    \"name\": \"What replaced the MCLR system for retail loans in 2019?\", \n\n    \"acceptedAnswer\": { \n\n      \"@type\": \"Answer\", \n\n      \"text\": \"The RBI mandated external benchmark-linked lending rates, most commonly the Repo-Linked Lending Rate (RLLR), for all new floating-rate retail loans from banks effective 1 October 2019, replacing MCLR as the default benchmark for these loans.\" \n\n    } \n\n  },{ \n\n    \"@type\": \"Question\", \n\n    \"name\": \"Is a lower MCLR always better for borrowers?\", \n\n    \"acceptedAnswer\": { \n\n      \"@type\": \"Answer\", \n\n      \"text\": \"Not necessarily. A lower MCLR generally means a lower starting interest rate, but the spread a bank adds on top, along with your loan reset date and tenure, also affects your final EMI, so comparing the full rate structure matters more than the MCLR figure alone.\" \n\n    } \n\n  },{ \n\n    \"@type\": \"Question\", \n\n    \"name\": \"What is the difference between MCLR and repo rate?\", \n\n    \"acceptedAnswer\": { \n\n      \"@type\": \"Answer\", \n\n      \"text\": \"MCLR is an internal, bank-calculated benchmark based on funding costs and operating expenses, while the repo rate is the rate at which the RBI lends to commercial banks, set through RBI monetary policy decisions. RLLR-linked loans track the repo rate directly, while MCLR-linked loans respond to it indirectly and with a lag.\" \n\n    } \n\n  },{ \n\n    \"@type\": \"Question\", \n\n    \"name\": \"Can my MCLR-linked loan rate increase during the tenure?\", \n\n    \"acceptedAnswer\": { \n\n      \"@type\": \"Answer\", \n\n      \"text\": \"Yes. If your bank's MCLR rises before your loan reset date, your interest rate and EMI can increase once the reset takes effect, since MCLR-linked loans are variable by design rather than fixed for the full tenure.\" \n\n    } \n\n  }] \n\n} \n\n<\/script> \n","protected":false},"excerpt":{"rendered":"<p>MCLR is an internal benchmark that banks use to&nbsp;determine&nbsp;the interest rate on certain floating-rate loans. Understanding&nbsp;what MCLR is&nbsp;can help you see why borrowing costs differ between banks and why the interest rate on some loans changes over time.&nbsp;&nbsp; Although MCLR&nbsp;remains&nbsp;relevant for many existing bank loans, most new floating-rate retail loans from banks now follow an<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[180],"tags":[],"class_list":["post-10063","post","type-post","status-publish","format-standard","category-personal-loan"],"_links":{"self":[{"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/posts\/10063","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/comments?post=10063"}],"version-history":[{"count":1,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/posts\/10063\/revisions"}],"predecessor-version":[{"id":10064,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/posts\/10063\/revisions\/10064"}],"wp:attachment":[{"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/media?parent=10063"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/categories?post=10063"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fatakpay.com\/blog\/wp-json\/wp\/v2\/tags?post=10063"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}