Delhi Delhi. HDFC Bank has amended its marginal cost of funds-based lending rate (MCLR). The bank has cut 5 basis points (BPS) in 2 -year MCLR. There is no change in other loan periods.

New MCLR rates effective from March 7, 2025

The new MCLR rates are effective from March 7, 2025. The updated rates will now be between 9.20 percent to 9.45 percent. Borrowers with loan borrowers associated with MCLR will get to see their EMIs according to these changes.

Understanding MCLR

Marginal Cost of Funds-Based Lending Rate (MCLR) is the minimum rate on which banks lend to customers. The Reserve Bank of India (RBI) launched MCLR in 2016. This ensures fair value for borrowers and prevents excessive interest rates.

Impact on borrowers

When MCLR decreases, the loan EMI also decreases. It is beneficial for borrowers whose loans are connected to MCLR. The recent reduction in the 2-year MCLR may reduce the cost of borrowing for some customers. However, since other loan periods remain unchanged, it will not affect all borrowers.

Who will be affected?

Loans borrowers taken before 2016 are still connected to the base rate or benchmark Prime Lending Rate (BPLR). These borrowers will not get any benefit immediately from the recent MCLR change. 2-year-old people associated with the year-old MCLR may have a slight deficiency in EMI.

No immediate effect on long term loans

For borrowers considering long -term loans, the recent MCLR amendment cannot provide immediate relief. Since only 2-year-old MCLR has been reduced, its effect on long-term loans is minimal.

HDFC Bank's decision to reduce the 2-year-old MCLR has brought some borrowers to some borrowers. However, customers with loans associated with other periods will not see any change. The bank has maintained stability in its debt rates for most categories.