Home Loan: Base Rate or MCLR Rate? Which is a better option for interest calculation?

The goal of both MCLR and base rate is to have a transparent monetary lending policy that helps financial institutions in fixing interest rate limits more conveniently. In case of a change in the policy rate, the RBI has mandated that banks should allow borrowers to switch from base to MCLR rate.

MCLR is calculated on the basis of marginal cost of funds.

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