Hdfc bank Has given good news to its customers. The bank has reduced the debt rates. The country’s largest private bank has cut Marginal Cost of Funds based Lending Rates (MCLR). This will benefit those lenders whose loan interest rates are linked to this benchmark. The bank has reduced MCLR by 0.15 per cent on select loan periods. After this cut, HDFC Bank’s MCLR has come in the range of 9 per cent to 9.20 per cent.
Impact of repo rate cut
Earlier, HDFC Bank’s MCLR rate was in the range of 9.10 to 9.35 percent. The new MCLR rate has become effective from 7 May 2025. After the RBI reduced the repo rate, HDFC Bank has decided to reduce the MCLR. The RBI reduced the repo rate by 0.25 per cent in April. RBI has cut the repo rate by 0.50 per cent since February 2025. The repo rate is the rate on which the RBI gives loans to commercial banks. Repo rate reduction reduces the cost of debt in the banking sector. After this, banks also reduce interest rates on loans for customers.
How MCLR works
After this decision of the bank, the EMI of customers will be reduced on the loan linked to MCLR like home loan or the loan duration will be shorter. Banks use MCLR as benchmark rates to fix interest rates on various floating rate loans including home loan, personal loan and auto loan. The cut in MCLR reduces the EMI of the loan or the loan duration becomes shorter. This provides good benefits to the debt holders in the long term.
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