<b>Your Money:</b> Customers on base rate should shift to MCLR

Though banks charge 0.5% of the outstanding amount, it makes sense to shift, given fall in rates

With State Bank of India (SBI) and other public and private sector banks cutting interest rates by 50-90 basis points (bps) sharply on Sunday and Monday, it would be a good time for home loan borrowers who are still on base rate, to shift to rates based on the Marginal Cost of fund-based Lending Rate (MCLR). 

Reason: while SBI has cut 50 bps for customers who are on MCLR, customers on base rate will get a benefit of only 5 bps. In fact, customers who have borrowed recently (less than a year ago), will have to wait to for a