If you are also thinking of taking a loan, then there is some great news for you. Despite the Reserve Bank of India (RBI) not making any change in the repo rate, many big banks of the country have announced a cut in their MCLR. With this decision, the interest rate of many types of loans, like home loans and personal loans, has now come down, which can also reduce your EMI. Let us know which bank has made how much change.
Reduction in MCLR
MCLR means Marginal Cost of Funds Based Lending Rate. This is the minimum rate at which banks can give loans to customers. When there is a cut in MCLR, it directly benefits those customers whose loan is linked to MCLR. The country’s largest public and private banks have given a big relief to the common man by reducing this rate.
SBI, PNB, and other banks reduced rates
The country’s largest public sector bank, State Bank of India (SBI), has reduced the interest rates of some of its loans by up to 5 basis points (bps). This change has come into effect from August 15, 2025. Now SBI’s overnight MCLR is 7.90%, while for one month it is 7.90%. This rate has become 8.30% for 3 months, 8.65% for 6 months, and 8.75% for one year. Two-year MCLR has come down to 8.80% and three-year 8.85%.
HDFC Bank, the largest private sector bank, has changed its MCLR rate from August 7, 2025, with new rates between 8.55% to 8.75%. Similarly, Bank of Baroda has also revised MCLR from August 12, 2025. Now Bank of Baroda’s overnight and one-month MCLR is 7.95%, while the three-month rate is 8.35% and the six-month 8.65%. One year MCLR has become 8.80%.
It will have a direct impact on home loans
The biggest benefit of the reduction in MCLR by banks is received by those who have taken a home loan or any other loan at a floating rate. Due to the reduction in rates, their monthly installment (EMI) may decrease, which will reduce their financial burden. This is also a good sign for those who are thinking of taking a new loan, because now they will be able to get a loan at a lower interest rate than before.