HDFC Bank has reduced its Marginal Cost of Funds-based Lending Rates (MCLR) by 5 basis points (bps) across select loan tenures, effective September 7, 2025. The move will bring a small relief to borrowers whose loans are linked to the MCLR benchmark.
What is MCLR and who is affected?
MCLR is the internal benchmark used by banks to set lending rates for products such as home loans, car loans, and personal loans. It is calculated based on factors like the marginal cost of funds, operating expenses, and the loan tenure.
Borrowers with MCLR-linked loans will see their interest rates adjusted in line with the revised levels during their reset cycle. However, those whose loans are tied to the external benchmark (like the RBI repo rate) will not be affected.
Revised HDFC Bank MCLR (from Sept 7, 2025)
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Overnight: 8.55%
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1 Month: 8.55%
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3 Month: 8.60%
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6 Month: 8.65%
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1 Year: 8.65% (most common for home loans; down from 8.70%)
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2 Year: 8.70%
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3 Year: 8.75%
Impact on borrowers
For those with home or personal loans linked to the one-year MCLR, EMIs will reduce slightly when their reset date arrives. No action is needed from borrowers, but staying informed about the reset cycle is important to understand when the revised rate will reflect in repayments.
