HDFC Bank Cuts MCLR, Home Loan EMIs Set to Fall

HDFC Bank : HDFC Bank has given a gift to its crores of customers. The bank has reduced the rates related to home loans. This means, your home loan EMI may reduce in future. HDFC Bank has reduced its Marginal Cost of Funds Based Lending Rate (MCLR) for some period. The bank has reduced the interest rate by 10 basis points i.e. up to 0.10% on selected tenures. The new rates have come into effect from March 7, 2026. After this change, the MCLR rates of the bank have now become between 8.15% to 8.55%, whereas earlier it was between 8.25% to 8.60%.

New MCLR rates

According to HDFC Bank’s website, the MCLR for overnight and 1-month terms is now 8.15%. For 3-month terms, it has been increased to 8.25%. For 6-month and 1-year terms, the MCLR is 8.35%. Additionally, the MCLR for 2-year terms will be 8.45% and for 3-year terms, it will be 8.55%.

What will be the impact on borrowers?

This reduction can benefit customers whose home loans, auto loans, or personal loans are linked to the MCLR. The lower rate could result in a slight reduction in EMIs for such loans. However, this benefit isn’t immediately realized. This change becomes effective when the loan’s interest reset date arrives.

Which customers will not be affected

Those whose loans are linked to an external benchmark, such as the RBI’s repo rate, will not be affected by this change. Their EMIs are determined based on changes in the repo rate.

What is MCLR?

MCLR is the minimum interest rate at which banks lend most of their money. The Reserve Bank of India (RBI) implemented it in 2016 to ensure faster transmission of policy rate changes to customers. While many new loans are now linked to external benchmarks like the repo rate, many older home loans, car loans, and personal loans are still based on MCLR. Therefore, changes in MCLR may impact these older borrowers.