HDFC MCLR Update: After the Reserve Bank of India lowered the repo rate, several banks have also reduced their loan interest rates.
Now, HDFC Bank, the largest private sector bank in the country, has given a pre-Holi gift to its customers.
HDFC Bank has reduced the Marginal Cost of Funds Based Lending Rate (MCLR) by 0.05% for a 2-year tenure. MCLR plays a key role in determining interest rates for home, car, and personal loans.
HDFC Bank’s MCLR Change
Before Holi, HDFC Bank has provided relief to its customers by reducing the MCLR for some loan tenures by 0.05%.
This reduction applies to a 2-year loan tenure, while MCLR for other tenures remains unchanged. The revised MCLR rates came into effect on March 7, 2025.
HDFC Bank MCLR Rates (Effective from March 7, 2025):
| Tenure | New MCLR (March 7, 2025) | Old MCLR |
|---|---|---|
| Overnight | 9.20% | 9.20% |
| One month | 9.20% | 9.20% |
| Three months | 9.30% | 9.30% |
| Six months | 9.40% | 9.40% |
| One year | 9.40% | 9.40% |
| Two years | 9.40% | 9.45% |
| Three years | 9.45% | 9.45% |
Effect of MCLR Changes
When banks adjust MCLR, the EMIs of floating-rate loans such as home loans, personal loans, and car loans are impacted.
If MCLR increases, loan interest rates rise, making EMIs costlier. Conversely, a decrease in MCLR results in lower interest rates, reducing EMIs. New borrowers also benefit, as they can avail of loans at reduced rates.
How is MCLR Determined?
Banks consider multiple factors while deciding MCLR, including deposit rates, the repo rate, operational costs, and the Cash Reserve Ratio (CRR).
A change in the RBI’s repo rate directly affects MCLR. If the repo rate is lowered, banks can reduce MCLR, making loans more affordable. Conversely, an increase in the repo rate leads to a higher MCLR, making EMIs more expensive.
