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Banking institutions may specify interest reset times on the drifting rate loans and actually have year reset clause.

Tuesday, March 3rd, 2020

Banking institutions may specify interest reset times on the drifting rate loans and actually have year reset clause.

The periodicity of reset is the one 12 months or reduced. The MCLR prevailing regarding the day the loan is sanctioned should be relevant till the following reset date, aside from the alterations in the standard through the period that is interim.

The banks reset the interest rate after 12 months for most MCLR-linked home loan contracts. Therefore if some body has had a mortgage from the bank, say in May 2016, the next reset date is supposed to be in might 2017. (more…)