Ans: Benchmark lending rates can be one of the following: Repo Linked Lending Rate: Such lending rates follow RBI’s policy rates and bear rapid adjustment with every variation in policy rates.    Marginal Cost of Funds oriented Lending Rate: MCLR is closely related to a bank’s cost of funds and repo rate. If the repo rate changes, it will impact the floating interest rates of home loans. In case any bank reduces MCLR, the floating interest rate of a home loan also decreases.