Karur Vysya Bank (KVB) has announced a hike in its Marginal Cost of Funds Based Lending Rate (MCLR), bringing higher borrowing costs for many customers. The revised rates will come into effect from July 22, 2026.
If your home loan, car loan, or personal loan is linked to the MCLR, your EMI could increase when your loan reaches its next reset date.
KVB Increases MCLR Across Most Loan Tenures
The bank has raised its MCLR by 5 to 10 basis points (bps) for most loan tenures. However, the three-month MCLR remains unchanged.
Here are the revised rates:
Overnight MCLR: Increased from 8.75% to 8.85%
One-Month MCLR: Increased from 8.65% to 8.75%
Three-Month MCLR: Remains unchanged at 8.95%
Six-Month MCLR: Increased from 9.10% to 9.15%
One-Year MCLR: Increased from 9.25% to 9.35%
New MCLR Rates
| Loan Tenure | Old Rate | New Rate | Effective From |
|---|---|---|---|
| Overnight | 8.75% | 8.85% | July 22, 2026 |
| One Month | 8.65% | 8.75% | July 22, 2026 |
| Three Months | 8.95% | 8.95% | No change |
| Six Months | 9.10% | 9.15% | July 22, 2026 |
| One Year | 9.25% | 9.35% | July 22, 2026 |
How Will This Affect Borrowers?
An increase in the MCLR means borrowing has become more expensive. Customers with loans linked to the MCLR may have to pay higher EMIs after their next interest rate reset.
The biggest impact is likely to be on home loan borrowers, as most home loans are linked to the one-year MCLR.
Customers with car loans and personal loans tied to the MCLR may also see a rise in their monthly repayments.
New Rates Effective From July 22
Karur Vysya Bank said the revised MCLR has been announced under SEBI’s Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015.
The new rates will be applicable from July 22, 2026, for both new and existing borrowers whose loans are linked to the MCLR.
