India’s largest private lender HDFC Bank has given good news to millions of customers.
The bank has reduced interest rates linked to loans, which could lower EMIs for many borrowers.
The bank has cut its Marginal Cost of Funds Based Lending Rate (MCLR) for selected loan tenures by 10 basis points (0.10%).
The new rates came into effect from March 7, 2026.
After the revision, the bank’s MCLR now ranges between 8.15% and 8.55%, compared to the earlier range of 8.25% to 8.60%.
New MCLR Rates After the Cut
According to the bank’s official website, the updated MCLR rates are as follows:
Overnight and 1-month MCLR: 8.15%
3-month MCLR: 8.25%
6-month and 1-year MCLR: 8.35%
2-year MCLR: 8.45%
3-year MCLR: 8.55%
These revised rates determine the minimum interest rate at which the bank lends money for many types of loans.
How This Affects Loan Borrowers
This rate cut can benefit customers whose home loans, auto loans, or personal loans are linked to MCLR.
When the lending rate decreases, borrowers may see a slight reduction in their monthly EMI payments. However, the change does not happen immediately.
The lower rate will apply only when the loan’s interest reset date arrives, which depends on the terms of the loan agreement.
Which Borrowers Will Not See Any Change
Not all customers will benefit from this announcement.
Borrowers whose loans are linked to an external benchmark, such as the Reserve Bank of India repo rate, will not be affected by this change.
Their EMIs depend on changes in the Repo Rate, not the MCLR set by banks.
What Is MCLR and Why It Matters
The MCLR (Marginal Cost of Funds Based Lending Rate) is the minimum interest rate at which banks can offer most loans.
It was introduced in 2016 by the Reserve Bank of India to make sure changes in policy rates are passed on to customers more quickly.
Today, many new loans are linked to external benchmarks like the repo rate.
However, a large number of older home loans, car loans, and personal loans are still based on MCLR.
Because of this, any change in MCLR can still impact a significant number of borrowers.
