Just before the festive season, HDFC Bank, India’s largest private bank, has delivered an unwelcome surprise to its customers by increasing the Marginal Cost of Funds-based Lending Rate (MCLR).
This increase means that anyone planning to buy a car or home before the festivities will face higher loan interest rates.
Consequently, customers who already have existing loans will see their monthly EMIs rise as well. The MCLR has been hiked by 0.05 percent.
HDFC Bank Revises MCLR Rates
The revised MCLR impacts the EMI of various floating rate loans, such as home loans, personal loans, and auto loans.
As MCLR increases, the loan interest rates rise, leading to higher EMIs for borrowers. These new rates have taken effect from October 7, 2024.
Specifically, HDFC Bank has increased the MCLR by 0.05 percent for six-month and three-year loans, with rates now ranging from 9.10% to 9.50%.
New MCLR Rates at HDFC Bank:
Overnight MCLR: 9.10%
One-month MCLR: 9.15%
Three-month MCLR: 9.30%
Six-month MCLR: 9.45%
One-year MCLR: 9.45%
Two-year MCLR: 9.45%
Three-year MCLR: 9.50%
Factors Affecting MCLR Calculation
Several factors contribute to determining the MCLR, including deposit rates, repo rates, operational costs, and the cost of maintaining the cash reserve ratio.
Changes in the repo rate directly affect the MCLR, which in turn impacts loan interest rates and increases the EMIs for borrowers.
Impact on Loan Types
This increase in MCLR will result in higher interest rates for all types of loans, including home, auto, and personal loans.
As a result, existing loan customers will need to pay more in monthly EMIs, and new loans will also come with higher interest rates.
