If you have a loan with HDFC Bank, there is some good news.
The bank has reduced its MCLR rates by 5 to 10 basis points, which could bring some relief to eligible borrowers.
The new rates will come into effect from September 7, 2026.
But there is an important catch: the lower rate may not reduce your EMI immediately.
Here is what HDFC Bank customers need to know.
HDFC Bank Cuts MCLR Rates
HDFC Bank has reduced its Marginal Cost of Funds-Based Lending Rate (MCLR) across different loan tenures.
The bank’s MCLR range has now come down to 7.90%–8.60%, from the earlier 8.00%–8.65%.
Here are the revised rates:
| Loan Tenure | Old MCLR | New MCLR |
|---|---|---|
| Overnight | 8.00% | 7.90% |
| 1 Month | 8.00% | 7.90% |
| 3 Months | 8.15% | 8.05% |
| 6 Months | 8.30% | 8.25% |
| 1 Year | 8.40% | 8.35% |
| 2 Years | 8.55% | 8.45% |
| 3 Years | 8.65% | 8.60% |
The biggest reduction is for the 2-year MCLR, which has been cut by 10 basis points, from 8.55% to 8.45%.
The 1-year MCLR, which is an important benchmark for many loans, has also been reduced by 5 basis points to 8.35%.
What Exactly Is MCLR?
MCLR is the minimum lending rate used by banks for certain types of loans.
The Reserve Bank of India (RBI) introduced the MCLR system in 2016. It is linked to the bank’s cost of raising funds.
However, your actual loan interest rate is not necessarily the same as the MCLR.
The final rate can depend on factors such as the loan type, bank’s spread and your credit profile.
Will Your EMI Become Cheaper?
This is where borrowers need to pay attention.
A lower MCLR can reduce the interest rate on an MCLR-linked loan. This can eventually help reduce your EMI or shorten your loan repayment period.
However, the benefit may not appear immediately.
MCLR-linked loans usually have a reset date, which may come after six months or one year, depending on the terms of the loan.
When your reset date arrives, the bank will calculate your loan interest based on the applicable MCLR at that time.
So, if your loan is linked to MCLR, the September 7 rate cut could provide some relief when your next reset takes place.
Who Will Benefit?
The MCLR reduction will mainly benefit customers whose loans are linked to MCLR.
If your loan is linked to another benchmark, such as an external benchmark or repo rate, this particular MCLR cut may not directly change your interest rate.
Therefore, borrowers should check their loan agreement or latest loan statement to find out which benchmark their loan follows.
For eligible MCLR-linked borrowers, the rate cut could mean lower interest costs over the remaining loan period.
