HDFC Bank Reduces MCLR Rates, Benefiting Borrowers

HDFC Bank Adjusts MCLR Rates

Effective April 7, 2026, HDFC Bank has announced a reduction in its Marginal Cost of Funds-based Lending Rates (MCLR) for specific tenures by as much as 5 basis points (bps). A basis point is equivalent to one-hundredth of a percentage point. This adjustment is expected to directly benefit borrowers whose loans are linked to MCLR, as detailed on the bank's official website. The new MCLR rates now range from 8.10% to 8.55%, a decrease from the previous range of 8.15% to 8.55%, depending on the loan tenure.

The changes primarily impact short-term tenures, while most medium- and long-term MCLR rates remain unchanged. Specifically, the overnight and one-month MCLR rates have been lowered from 8.15% to 8.10%, and the three-month MCLR has decreased from 8.25% to 8.20%. In contrast, the six-month, one-year, two-year, and three-year MCLR rates remain steady at 8.35%, 8.35%, 8.45%, and 8.55%, respectively.

Tenor Old MCLR New MCLR Change

Overnight 8.15% 8.10% 0.05%

1 Month 8.15% 8.10% 0.05%

3 Month 8.25% 8.20% 0.05%

6 Month 8.35% 8.35% No change

1 Year 8.35% 8.35% No change

2 Year 8.45% 8.45% No change

3 Year 8.55% 8.55% No change

This adjustment is likely to lower the EMI for borrowers.

Understanding MCLR and Other Lending Benchmarks

The Marginal Cost of Funds-based Lending Rate (MCLR) represents the minimum interest rate a bank can charge on loans. It establishes a baseline for interest rates, ensuring that borrowers are not charged below a certain threshold unless permitted by the Reserve Bank of India (RBI). Introduced in 2016, MCLR has become a vital reference point for home, personal, and business loans.

Currently, HDFC Bank's base rate is set at 8.80% (effective December 26, 2025), while its benchmark PLR (BPLR) stands at 17.30% per annum. Additionally, fixed deposit interest rates have been revised, with general customers earning between 3.25% and 7%, and senior citizens also receiving rates in the same range, reflecting a 10 bps increase in select tenures.

With the reduction in short-term MCLR rates, borrowers with floating-rate loans linked to these tenures will experience slight decreases in their interest expenses. This change can alleviate repayment pressures for those with loans associated with overnight, one-month, or three-month MCLR, particularly for personal and business financing.