HDFC Bank, one of India’s largest private banks, has given good news to millions of customers this festive season. Just before Diwali shopping and celebrations, the bank reduced its loan interest rates. This change makes it easier for customers to take home, car, or personal loans. The monthly installment (EMI) burden will now be slightly lower for both new and existing customers.
HDFC Bank cut its Marginal Cost of Funds Based Lending Rate (MCLR) by up to 0.15 percent. This reduction applies to loans of different tenures. MCLR is the minimum interest rate below which a bank cannot give a loan. By reducing this rate, the bank also lowers the interest rates on home loans, car loans, and personal loans.
HDFC Bank Cuts MCLR: Big Savings for Customers
From October 7, 2025, HDFC Bank has cut its loan interest rates. The one-year MCLR, linked to most loans, dropped from 8.65% to 8.55%. The three-month and one-month MCLR fell by 0.15% to 8.45% and 8.40%. The six-month MCLR is now 8.55%, and the two-year and three-year MCLR are 8.60% and 8.65%.
This cut will lower borrowers’ monthly EMIs. For floating rate loans, the bank applies the new rate on the next interest reset date. For example, if a home loan links to the one-year MCLR, the bank will reduce the interest by 0.10% on the next reset, lowering the EMI. Even a small rate cut can save customers a lot of money over time.
Why HDFC Bank Cut Rates
Experts say HDFC Bank’s move follows RBI’s policy. The central bank kept the repo rate unchanged, but private banks face competition, so they lower rates. HDFC Bank cut MCLR to attract customers during Diwali.
The bank sets MCLR based on deposit costs, RBI’s repo rate, CRR, and its expenses. When these change, the bank adjusts MCLR. This cut is not just a festive offer, it also shows market competition.
HDFC Bank hopes the lower rates will reduce customers’ debt and boost festive shopping. Economists say lower EMIs give customers extra money, which can increase spending and help the economy. This move is both a festive gift and a sign of customer-friendly banking.