HDFC Bank has recently reduced its lending interest rate, offering relief to customers with specific loan tenures. The bank has lowered the Marginal Cost of Funds Based Lending Rate (MCLR) by 5 basis points (bps) for 2-year loans. This new rate took effect on March 7, 2025. However, there have been no changes to the MCLR rates for loans of other durations.
Which Loan Tenure Has the Interest Rate Reduction?
The bank has reduced the MCLR for 2-year loans from 9.45% to 9.40%. Meanwhile, the MCLR rates for other tenures remain unchanged:
- 1-month MCLR: 9.20%
- 3-month MCLR: 9.30%
- 6-month MCLR: 9.40%
- 1-year MCLR: 9.40%
- 3-year MCLR: 9.45%
Understanding MCLR
The Marginal Cost of Funds Based Lending Rate (MCLR) is the minimum interest rate that banks can charge their customers for loans. Introduced by the Reserve Bank of India (RBI) in 2016, the MCLR system was designed to ensure transparency in loan interest rates. Floating rate loans such as home loans, personal loans, and auto loans that are tied to MCLR are directly influenced by these rate changes. Consequently, borrowers linked to the 2-year MCLR will benefit from this reduction.
HDFC Bank’s Base Rate and Benchmark PLR
HDFC Bank has retained its base rate at 9.45%, effective since September 9, 2024. Additionally, the bank’s benchmark prime lending rate (BPLR) remains at 17.95% since the same date.
HDFC Bank Home Loan Interest Rates
HDFC Bank’s home loan interest rates are connected to the repo rate, causing them to fluctuate during the loan tenure. For salaried and self-employed individuals, home loan interest rates typically range from 9.40% to 9.95%. Meanwhile, special category customers may avail rates between 8.70% and 9.55%. These rates generally apply to individuals with stable incomes, strong credit scores, and those meeting the bank’s eligibility criteria.
Impact on Borrowers
The reduction in HDFC Bank’s 2-year MCLR will make loans with this tenure more affordable for borrowers. However, since MCLR rates for other tenures remain unchanged, those with different loan durations will see no immediate impact on their repayment amounts.
