HDFC Bank has announced a cut in interest rates. Based on the information provided by the bank, the bank has reduced its marginal cost of funds-based lending rate (MCLR) by up to 5 basis points (BPS) for select tenors. After this cut, HDFC Bank's MCLR is now between 9.15% and 9.45%. The new rates have come into effect from today i.e. January 7, 2025.
Based on the information provided by the bank, the bank has reduced its Marginal Cost of Funds-Based Lending Rate (MCLR) by up to 5 basis points (BPS) for select tenors.
EMIs of home-personal loans will be reduced
The reduction in MCLR rates will have a direct impact on the Equated Monthly Installments (EMIs) on old floating rate loans such as home loans, personal loans and business loans that are linked to MCLR. With the reduction in MCLR rates, EMIs on these loans will also come down. According to the bank, the overnight MCLR has been reduced by 5 bps to 9.20% from 9.15%.
One-month MCLR has been kept unchanged at 9.20%, three-month MCLR has been kept unchanged at 9.30%. Six-month and one-year MCLR has been reduced by 5 bps to 9.50% from 9.45%. Two-year MCLR has been kept unchanged at 9.45%. Three-year MCLR has been reduced by 5 bps to 9.50% from 9.45%.
The revision in the bank's MCLR affects the EMI of all types of floating loans, including home loans, personal loans and auto loans. When the MCLR increases, the interest on the loan increases and when it decreases, the EMI decreases.
The EMI interest on your home loan, car loan, personal loan is determined by this, for example, if you are planning to buy a car or a house, you will get the loan cheaper than before. Apart from this, those who already have a loan, their monthly loan EMI may be slightly lower.
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What is MCLR?
MCLR is the minimum interest rate that a financial institution charges for a particular loan. It sets the lower limit of the interest rate for the loan. A cut in the repo rate is expected in the RBI's monetary policy meeting to be held in February. After this, loans will become cheaper. For a long time, the common people have been waiting for a reduction in the increased EMI of home and car loans.
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