HDFC Bank cuts these lending rates by 10 bps; check details

HDFC Bank has announced a reduction in its Marginal Cost of Funds-based Lending Rates (MCLR), which will benefit borrowers whose loans are linked to this benchmark. The bank has lowered the MCLR by up to 10 basis points (bps) on select loan tenures. A basis point is one-hundredth of a percentage point, so a 10 bps cut translates to a 0.10% decrease in interest rates.

Following this revision, HDFC Bank’s MCLR now ranges from 8.90% to 9.10%, depending on the loan tenure. This is a decrease from the previous range of 9% to 9.20%, which was applicable during May 2025. The revised MCLR rates have come into effect from June 7, 2025.

Big savings for home loan borrowers as EMIs to fall significantly after RBI cuts repo rate by 50 bps

This move by HDFC Bank comes in the wake of the Reserve Bank of India (RBI) reducing the repo rate by 50 bps in June, bringing the total cut to 100 bps or 1% since February 2025.

Latest HDFC Bank lending rates

The bank has reduced the overnight and one-month MCLR tenures by 10 bps, from 9% to 8.9%. The three-month MCLR has been cut from 9.05% to 8.95%, down by 10 bps and the six-month MCLR has been reduced from 9.15% to 9.05%. The one-year MCLR rates have been reduced from 9.15% to 9.05%, down by 10 bps. The two year- MCLR is reduced by 10 bps from 9.20% to 9.10%. The three-year MCLR has been reduced from 9.20% to 9.10%.

Source- HDFC Bank website

Borrowers with MCLR-linked loans such as home loans may see a reduction in their EMIs (equated monthly installments) or a shorter loan tenure, depending on their loan terms and reset periods.

Also read: Lower home loan EMIs for loans from PNB, Indian Bank, Bank of Baroda, BOI as RBI cuts repo rate by 50 bps

How does MCLR affect borrowers?

The MCLR is a benchmark rate used by banks to determine interest rates on various floating-rate loans, including home loans, personal loans, and auto loans. A decrease in MCLR translates to a potential drop in loan EMIs or a shorter loan tenure, benefiting borrowers in the long term. This will impact whether borrowers have chosen if it's a fixed loan or a floating rate loan.

What is MCLR

The Marginal Cost of the Fund-Based Lending Rate or the MCLR is the minimum interest rate a financial institution needs to charge for a specific loan. It dictates the lower limit of the interest rate for a loan. This rate limit is set in stone for borrowers unless specified otherwise by the Reserve Bank of India. The RBI introduced the MCLR in 2016.