HDFC Bank has announced a big relief for its customers. The bank has reduced the loan interest rates by cutting its Marginal Cost of Funds Based Lending Rate (MCLR) by 30 basis points, which will benefit all the customers whose loans are linked to this benchmark. This change has come into effect from July 7, 2025, and has reduced the interest rates on loans of different tenures. Earlier, the bank's MCLR was between 8.90% to 9.10%, which has now come down to between 8.60% to 8.80%.

The effect of this reduction will be seen on loans with tenures of overnight, one month, three months, six months, one year, two years, and three years. With this move, customers will have to pay less interest, which will reduce their monthly installments (EMI) and ease the financial burden.

Interest rates on home loans

Talking about home loans, HDFC Bank home loan interest rates are linked to the repo rate and can change throughout the loan period. Currently, as of July 7, 2025, normal home loan interest rates range between 8.50% to 9.40%, while special rates range between 7.90% to 9.00%. These rates have been fixed on the basis of the current repo rate of 5.50%. This reduction will especially benefit those customers who are planning to take a new home loan or whose existing loan interest rates are linked to the repo rate.

What is MCLR

MCLR (Marginal Cost of Funds Based Lending Rate) is a benchmark interest rate set by the Reserve Bank of India (RBI), based on which banks fix the interest rates of their loans. This is the minimum rate at which banks can lend. MCLR is calculated based on factors such as the bank's borrowing cost, interest rate offered on deposits, operating costs, and negative impact on CRR.

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