Karur Vysya Bank Hikes Loan Interest Rates: Borrowers with Karur Vysya Bank face an increased financial burden as the private sector lender announced a hike in its Marginal Cost of Funds Based Lending Rates (MCLR) across all tenures.
According to the bank’s latest regulatory filing, the revised rates take effect on August 22, 2026. This upward revision will directly impact customers with floating-rate home loans, car loans, and personal loans tied to MCLR benchmark rates.
MCLR represents the minimum interest rate below which a bank cannot grant loans. Any increase in this benchmark rate naturally leads to a corresponding hike in interest rates for floating-rate loans, subsequently raising the Equated Monthly Instalment (EMI) for borrowers during their loan reset period. However, fixed-rate loan accounts remain unaffected by this adjustment.
Detailed Breakdown of Revised MCLR Rates Across Tenures
Karur Vysya Bank has increased its MCLR rates across various tenures by 5 basis points (0.05%) to 25 basis points (0.25%).
- Overnight MCLR: Increased from 8.85% to 9.00%
- One-Month MCLR: Increased from 8.75% to 9.00%
- Three-Month MCLR: Increased from 8.95% to 9.15%
- Six-Month MCLR: Increased from 9.15% to 9.30%
- One-Year MCLR: Increased from 9.35% to 9.40%
Since most retail credit products, including home loans, are linked to the one-year MCLR benchmark, the shift to 9.40% will directly result in higher EMI obligations for existing retail borrowers upon their scheduled reset dates.
Direct Impact on Existing and New Borrowers
The rate adjustment directly affects customers whose loans are due for an interest rate reset under floating terms. Once reset, monthly instalments will increase accordingly. Additionally, fresh borrowers seeking home, car, or personal loans from Karur Vysya Bank will now face higher borrowing costs than before.
