HDFC bank has announced a 0.05% cut in its Marginal Cost of Funds Based Lending Rate (MCLR) on select tenures, effective September 8, 2025. This festive-season move brings relief to millions of borrowers.

What Changed?

Tenure

Old MCLR

New MCLR

Change

Overnight

8.55%

8.55%

—

1-month

8.55%

8.55%

—

3-month

8.60%

8.60%

—

6-month

8.70%

8.65%

↓ 0.05%

1-year

8.70%

8.65%

↓ 0.05%

2-year

8.75%

8.70%

↓ 0.05%

3-year

8.75%

8.75%

—

Note: The 1-year MCLR, which is the benchmark for most floating-rate home loans, has been reduced by 5 basis points.

What This Means for Borrowers

  • Lower EMIs on existing floating-rate loans (home, car, personal).
  • Reduced overall interest over long-term loans.
  • Better affordability for new borrowers during the festive season.
  • Example: A Rs 50 lakh home loan for 20 years can save thousands of rupees over the loan tenure.

Why hdfc bank Cut Rates

MCLR is influenced by:

  • Deposit interest rates
  • RBI repo rate & monetary policy
  • Bank operational costs
  • Cash Reserve Ratio (CRR) requirements

The cut comes as banks aim to stimulate credit growth ahead of navratri and Diwali.

How MCLR Affects EMIs

  • Floating-rate loan EMIs are directly linked to MCLR.
  • When MCLR drops, EMIs decrease; when it rises, EMIs increase.
  • Effect is seen when the loan’s next interest reset cycle occurs.

Festive Season Boost

  • Lower EMIs encourage homebuyers and car buyers.
  • Even a modest reduction improves customer sentiment.
  • Could drive strong demand for loans during navratri and Diwali.

✅ Bottom Line: hdfc Bank’s MCLR cut of 0.05% makes loans cheaper just in time for the festive season. Borrowers with floating-rate loans and new applicants for home, car, or personal loans stand to benefit the most.

 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.

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Kokila Chokkanathan

09/09/2025 11:36 AM