If you are planning to take a home loan, car loan, or personal loan from Canara Bank, there’s good news.
The bank has reduced its MCLR (Marginal Cost of Funds Based Lending Rate) by 5 basis points (0.05%) across all loan tenors. The new rates have come into effect from November 12, 2025.
This means if your loan is linked to the MCLR, your EMI (Equated Monthly Instalment) will now be slightly lower.
What is MCLR?
MCLR (Marginal Cost of Funds Based Lending Rate) is the minimum interest rate at which a bank can lend to its customers.
It helps determine the interest rate for floating rate loans such as home loans and car loans.
When a bank reduces its MCLR, borrowers benefit through lower EMIs or by shortening their loan tenure. Hence, this move by Canara Bank brings relief to many loan holders.
Canara Bank’s New MCLR Rates (Effective from November 12, 2025)
| Tenor | Old Rate | New Rate |
|---|---|---|
| Overnight | 7.95% | 7.90% |
| One month | 8.00% | 7.95% |
| Three months | 8.20% | 8.15% |
| Six months | 8.55% | 8.50% |
| One year | 8.75% | 8.70% |
| Two years | 8.90% | 8.85% |
| Three years | 8.95% | 8.90% |
Who Will Benefit?
This change applies to customers with floating rate loans, i.e., those linked to the MCLR.
If you’ve taken a loan on or after November 12, 2025, the new rates will automatically apply.
Customers with older loans can choose to switch to MCLR-based rates by contacting their bank branch.
(Note: This is not applicable for fixed-rate loans.)
How Much Will the EMI Reduce?
Let’s take an example:
If you have a home loan of ₹30 lakh for 20 years at 8.75%, the new rate of 8.70% will reduce your EMI by about ₹90 per lakh.
That means your total EMI could decrease by around ₹1,800 per month.
Though this may seem small, it can lead to significant savings over the loan period.
Why Did Canara Bank Reduce Interest Rates?
According to financial experts, this reduction aims to boost loan demand and support economic growth.
Lower rates make borrowing cheaper, which can stimulate real estate and auto sectors, encouraging more purchases.
What Should Customers Do?
If your loan is not on MCLR, visit your bank branch to request a switch.
If your loan already has a floating rate, the EMI will automatically adjust to the new rate on your next interest reset date.
