HDFC Bank has revised its Marginal Cost of Funds-Based Lending Rate (MCLR). The new rates came into effect on July 7, 2026.
While the bank has reduced the overnight lending rate by 5 basis points, it has increased the MCLR by 5 basis points for selected loan tenures, including the one-year and three-year periods.
The change is important because most home loans and car loans are linked to the one-year MCLR. As a result, many retail borrowers may see a slight increase in their monthly EMI when their loan interest rate is reset.
Which Loan Rates Have Changed?
Under the latest revision, the overnight MCLR has been reduced from 8.10% to 8.05%. However, the one-year MCLR has increased from 8.40% to 8.45%, while the three-year MCLR has gone up from 8.65% to 8.70%.
The MCLR for the one-month, three-month, six-month, and two-year tenures remains unchanged at 8.05%, 8.20%, 8.35%, and 8.55%, respectively.
Although the lower overnight rate may benefit corporate and short-term borrowers, the increase in the one-year MCLR is likely to affect ordinary consumers because most retail loans, including home and auto loans, are linked to this benchmark. Even a 0.05% increase can raise the monthly EMI.
HDFC Bank Latest MCLR Rates
| Loan Tenure | New Rate | Old Rate |
|---|---|---|
| Overnight | 8.05% | 8.10% |
| 1 Month | 8.05% | 8.05% |
| 3 Months | 8.20% | 8.20% |
| 6 Months | 8.35% | 8.35% |
| 1 Year | 8.45% | 8.40% |
| 2 Years | 8.55% | 8.55% |
| 3 Years | 8.70% | 8.65% |
When Will Borrowers See the Impact?
For loans linked to MCLR, the interest rate is revised only on the reset date, which is usually every six months or one year, depending on the loan agreement.
This means that borrowers will not see an immediate increase in their EMIs after the MCLR revision. The higher interest rate will apply only from the next reset date mentioned in their loan contract.
What Is MCLR?
The Marginal Cost of Funds-Based Lending Rate (MCLR) is the minimum interest rate below which a bank cannot lend money to its customers.
The Reserve Bank of India (RBI) introduced the MCLR system in 2016 to make loan pricing more transparent and to prevent banks from setting lending rates at their own discretion.
