HDFC Bank, the country's largest private bank, has given a special gift to the people of the country on the New Year. The bank has given great relief by reducing the EMI of home loan and car loan. According to the information, HDFC Bank has reduced MCLR by 5 basis points. After this cut, HDFC Bank MCLR now ranges between 9.15 percent to 9.45 percent.
The revised rates have come into effect from January 7, 2025. Lower MCLR reduces loan interest rates, resulting in lower EMIs and lower borrowing costs. The cut in MCLR rates will have a direct impact on the EMIs of old floating rate loans like home loans, personal loans and business loans which are linked to MCLR. Due to reduction in MCLR rates, EMI on these loans will also reduce.
Overnight MCLR has been reduced by 5 bps, from 9.20 percent to 9.15 percent. There is no change in one month MCLR and the interest rates will remain at 9.20 percent. MCLR for three months has been kept at 9.30 percent only. Six-month and one-year MCLR have been cut by 5 bps from 9.50 per cent to 9.45 per cent, and two-year MCLR is unchanged at 9.45 per cent. The three-year MCLR has been reduced by 5 bps from 9.50 percent to 9.45 percent.
| Tenure | MCLR |
| overnight | 9.15% |
| 1 month | 9.20% |
| 3 months | 9.30% |
| 6 months | 9.40% |
| 1 year | 9.40% |
| 2 years | 9.45% |
| 3 years | 9.45% |
Source: hdfc bank website
The benchmark prime lending rate of HDFC Bank is 17.95 percent per annum, which is effective from September 9, 2024. The applicable base rate is 9.45 percent and is effective from September 9, 2024. If we talk about the new home loan interest rates of HDFC Bank, then they are linked to the repo rate. The interest rate on Adjustable Rate Home Loan (ARHL) is linked to HDFC Bank's External Benchmark Lending Rate (EBLR), which is based on the repo rate. The interest rate for ARHL is subject to change throughout the loan tenure.
Although RBI has not made any change in the repo rate in the policy meeting of December, but the central bank is likely to do so in the upcoming policy meeting in 2025. A report by HSBC Research says that the repo rate can be cut by 0.25 percent in the month of February. Whereas there may be a reduction of 50 basis points in the entire year. This means that the repo rate has come down to 6 percent. The future interest rate scenario is still uncertain. Some experts do not see the possibility of a rate cut in the coming few quarters. However, others expect a reduction of more than 50 basis points in 2025. Japanese investment bank Nomura expects RBI to reduce interest rates by 1 percent in 2025.
