HDFC Bank Cuts MCLR by 0.20% across Tenors; Loan EMIs are Cheaper

Updated on: 24 Jan 2024 // 2 min read // #mmm news
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Good news for HDFC Home Loan, Personal Loan, and Auto Loan borrowers: the HDFC Bank Ltd has slashed lending rates by 0.20 percent across the tenor with effect from April 7, 2020.

The bank has updated the latest Marginal Cost of funds based Lending Rates (MCLR) on its website. The revised overnight MCLR is 7.60 percent, one-year MCLR is 7.95 percent, and three-year MCLR stands at 8.15 percent.

Revised HDFC MCLR – w.e.f April 7, 2020




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Effective Date: March 13, 2020​​​​​​​

Base Rate – 8.65%

PLR (BPLR) – 17.15%

Amid countrywide lockdown caused due to Coronavirus pandemic, the financial activity is almost at a standstill. To spur the economic growth in the country, the RBI slashed a 75 bps repo rate cut on March 27, 2020. Following the central bank’s stand to ease the borrowing stress for the end-users, all major banks, including HDFC, have extended repayment moratorium of three months to the consumers. Now banks are slashing lending rates to make borrowing less expensive in the country.

The state bank of India has also announced a steep cut of 35 bps wef April 10, 2020.

Impact of MCLR rate cut on borrowers

  • For new borrowers:With MCLR rate cut, the effective rate of interest on new loans reduces, and thus it becomes cheaper to borrow new loans. However, from October 2019, the RBI has made it mandatory for banks to lend at a lending rate linked to external benchmarks such as repo rates.
  • For existing borrowers: Those borrowers whose loans are linked to MCLR stand to win with MCLR rate cut. However, the MCLR rates have a rate reset tenor attached. So, loans that are due to reset in April will get the benefit of the revised MCLR rate immediately.